Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

The Secretary of State was asked—

Oral Answers to Questions — India (Religious Persecution)

Mr. Laurence Robertson: What discussions he has had with the Indian Government regarding the persecution of Christians in that country; and if he will make a statement. [86572]

The Minister of State, Foreign and Commonwealth Office (Mr. Geoffrey Hoon): India is widely respected for its commitment to religious diversity. We have made clear to the Indian Government our concern over attacks on religious minorities. My right hon. Friend the Foreign Secretary raised the issue with the Indian national security adviser and principal secretary to the Indian Prime Minister in January. The late Derek Fatchett urged the Indian Home Minister last year to take steps to restore the confidence of the Christian community. Officials here and, indeed, in India are in touch with representatives of those communities.

Mr. Robertson: I thank the Minister for his reply. Is he aware that, on 13 January this year, more than 140 bishops in India wrote to the President saying:
Christians are being maligned and persecuted and a wave of hatred is being spread against them"?
Is he also aware of reports in the press about the Vishwa Hindu Parishad, which is currently operating illegally in India and also collecting money in the United States and this country, and is alleged to be persecuting Christians on the back of the money that it is raising?

Mr. Hoon: I am aware of the letter and, indeed, of the situation. That is why—as I said in answer to the hon. Gentleman's main question—we continue to urge India to respect the rights of minorities. We have, however, welcomed statements by the Indian President and Prime Minister condemning attacks on, in particular, Christian minorities. We will continue to urge them to preserve India's secularism and respect for religious minorities.

Oral Answers to Questions — European Common Foreign and Security Policy

Mr. Desmond Swayne: If he will make a statement on his policy in respect of implementing a common defence and foreign affairs policy for the European Union. [86573]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): The Government believe that we are likely to have a bigger impact on what happens in the world if Europe speaks wherever possible with one voice and not with different voices. Britain has been in the lead, along with France, in promoting an initiative on European security. That will improve the ability of the European Union to draw on NATO's assets for crisis management and peacekeeping.
The initiative was warmly welcomed in Washington by all members of NATO, and in Cologne by all members of the European Union. It is a good example of the leadership that Britain now provides in Europe, which must be welcome to all hon. Members.

Mr. Swayne: Not quite, Madam Speaker.
Why did the Government agree at Cologne to the merging of the functions of the Western European Union into those of the European Union, when that very move was described by the Prime Minister only two years ago as an ill-judged transplant? What has changed?
If Her Majesty's Government do not intend there to be a single European army, what can the right hon. Gentleman do to make Mr. Prodi desist from calling for one?

Mr. Cook: I am sorry that I have been unable to carry the hon. Gentleman with me—and, probably, the House—in welcoming the initiative.
There is not the slightest prospect of a single European army. No one in the Council of Minister is proposing one, and no one would support one. Let us leave aside Britain's view: there is no question of France or any of the other major military powers of Europe putting their armies under a single European control. Following our experience of the past 10 years in the Balkans, however, it surely makes sense for Europe to consider how it can improve its decision making on security, and provide a better capacity to enforce that. Surely all hon. Members recognise that as a legitimate objective.

Mr. Jim Marshall: Does my right hon. Friend see any continuing role for the Parliamentary Assembly of the Western European Union when the other institutions are absorbed into the second pillar? He must agree that there is a need for some continuing supervision of common foreign and defence policy. Can he give some hope to those who are currently delegates from the House of Commons to the Parliamentary Assembly of the WEU?

Mr. Cook: I fully understand my hon. Friend's concern, but I think it is premature to bury the WEU. Throughout this initiative, we have stressed that the important thing is to ensure that we get the decision making right in the European Union, and provide the right capacity for it to carry out its security decisions. Only when we have done that will the time be right for us to consider whether the WEU has fulfilled its purpose.


I agree with my hon. Friend that, if we arrive at that point, it will be important for us to ensure that there is proper democratic scrutiny of security decisions.

Mr. John Maples: Can the Foreign Secretary explain why what the Prime Minister vetoed at Amsterdam became acceptable at Cologne? What exactly happened to change the Government's mind?

Mr. Cook: What has happened since Amsterdam is that over the past year, along with the French and our other partners in Europe, we have proceeded on the basis of our St. Malo declaration. As a result, we have a new communiqué from NATO which expands on the Berlin declaration, carried by the last Government. That enhances our ability to call on NATO's assets for the purpose of European security decisions. We have also considered how we can improve security decision making within the European Union. In the light of all those changes, there is an obvious question mark over whether it is necessary to keep the Western European Union as a body existing to call meetings, but not necessarily existing to replicate what can be done better in the European Union.

Mr. Maples: I am grateful to the Foreign Secretary, but I did not ask him about the Western European Union. He does not seem to have a reason for the fundamental change of policy announced at Cologne. Although hon. Members know that two years is a very long time for this Government to believe in anything, it was a fundamental change of policy. Is not the real reason for that change the fact that we were not going to be in the first group joining the euro, and the Prime Minister was worried about his European adulation rating? He needed a Euro-friendly policy at short notice, and the policy change was the sacrifice.
Is it not true that the development of a military capability outside NATO, as envisaged at Cologne, will inevitably create a conflict between the EU and NATO, undermine the United States commitment to Europe, and give the EU a role for which it is totally unsuited—as the Prime Minister, quite rightly, said at Amsterdam?

Mr. Cook: I welcome the hon. Gentleman to his role, but have to say that the initiative goes back long before Cologne, to last autumn, when we met—[Interruption.] The hon. Gentleman shakes his head, but I was there at St. Malo. The initiative goes back to St. Malo and the Portschach decision of last autumn. As for NATO, I tell Opposition Members that not a single ally in NATO failed to welcome what we have done—[Interruption.] I was also at Washington, but do not think that the hon. Gentleman was. I have the Washington communiqué, which records the welcome for what the European Union has done to strengthen the initiative. I have had many discussions with Madeleine Albright—[Interruption.] The only countries at the Washington NATO summit were the countries inside

NATO, and they all welcomed the initiative, which builds on the basis of the Berlin declaration. As I recall it, that declaration was negotiated and signed by one Michael Portillo. I honestly do not think that the hon. Member for Stratford-on-Avon (Mr. Maples) should try to outdo him in Euro-scepticism.

Ms Rachel Squire: Does my right hon. Friend agree that, in developing a common foreign and security policy, it is important to consider the role and perspective of countries that are in Europe, but are not currently either in the European Union or in NATO? Specifically, does he agree that Ukraine could play an important role in Europe? Will he try to ensure that Brussels remembers that Ukraine is now an independent country, and no longer a subsidiary of Russia?

Mr. Cook: I absolutely agree with my hon. Friend's last point. My right hon. Friend the Secretary of State for Defence has just return from a visit to Ukraine, and carried that message on behalf of Britain to the Government of Ukraine. Of course, through NATO we work closely with our partners for peace. Through the European security initiative that we are launching, we shall want to ensure that we have the closest possible contacts with those NATO members that are not in the European Union. I have had bilateral discussions with a number of those countries.

Mr. Menzies Campbell: Does the Foreign Secretary share my despair at the visceral and irrational anti-Europeanism that prompted the main question? Does he also agree that the lesson of the Balkans demonstrates that there should be a European defence capability, so that we may act when the United States is either unable or unwilling to do so? Does he also agree that no one in Europe can be satisfied when the European members of NATO have a defence budget that totals two thirds of the US defence budget, but produces only a fraction of the capability of the United States?

Mr. Cook: The right hon. and learned Gentleman makes a very valid point. Europe spends on defence the equivalent of 60 per cent. of that spent by the United States, yet Europe could field only 20 per cent. of the military aircraft involved in the recent conflict in Kosovo. There is something wrong in that mismatch of spending against output. It surely must make sense for Europe to co-operate more closely, and to ensure that we are better able to get value for our money. I echo the point made by the right hon. and learned Gentleman.
The issue is not one for NATO: it is not about territorial defence, but about peacekeeping and crisis management. Heaven knows, we have seen the need for that recently on our continent, and it is time that we were ready to respond to it.

Oral Answers to Questions — Middle East Peace Process

Dr. Brian Iddon: If he will make a statement on the initiatives taken by his Department to assist in the middle east peace process. [86574]

Ms Hazel Blears: What steps he plans to take to support the new Israeli Government in achieving a lasting peace settlement in the region. [86575]

Mr. Derek Wyatt: When he expects the Palestinian authority to be accorded statehood by the new Government in Israel. [86576]

Mr. Tony Colman: If he will make a statement on Her Majesty's Government's relations with the state of Israel. [86583]

Mr. Tony McNulty: When he next expects to meet representatives of the Israeli Government to discuss the middle east peace process; and if he will make a statement. [86586]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): We welcomed the election of Mr. Barak as Prime Minister of Israel. It provides an opportunity to break the stalemate on the peace process. Mr. Barak has yet to form his new Government, but my right hon. Friend the Prime Minister has spoken twice with him and offered him an open invitation for an early visit to Britain.
We have called for full implementation of the Wye agreement as a first step back on the path to peace. We helped to draft the EU Berlin declaration and we fully support its call for final status talks to be completed within a year.
Britain is one of the largest bilateral donors in support of the peace process. The Foreign Office recently supported a highly successful visit by Palestinian and Israeli teachers to Northern Ireland to study reconciliation projects. That has led to student exchanges between the two communities.
Progress on the peace process is primarily a matter for the parties to it, but Britain will do everything that it can to help them reach an outcome that brings a lasting and just peace to the region.

Dr. Iddon: My right hon. Friend will be aware that just two weeks ago the Israeli Government confiscated a very large tract of land between Mu'ale Adumim and east Jerusalem. If that land is developed it will cut off the north of the west bank from the south. In any negotiations with Mr. Barak, will my right hon. Friend try to dissuade him from developing the land, which is far more controversial even than Har Homa?

Mr. Cook: My hon. Friend touches on an important issue. In the Berlin declaration and in the declaration of the G8 summit at the weekend, we have called on the Government of Israel to cease settlement activity that unilaterally broke the peace agreement. I welcome the fact that Mr. Barak has said that he is not necessarily bound

to develop all the settlements. I hope that there will be a return to the negotiating table rather than a unilateral attempt to change the situation on the ground.

Ms Blears: Does my right hon. Friend agree that to achieve a lasting settlement throughout the region good relations between Israelis and Arabs are as important as good relations between Muslims and Jews? Will he urge the Iranian Government to release the Jewish people who were arrested in March this year? They have been subjected to spurious charges of spying and could face death. Does he agree that if any harm came to the Jewish people in Iran, it would be appropriate for us to reconsider whether our ambassador should remain in that country?

Mr. Cook: We have just sent an ambassador to Iran. President Khatami has made some welcome statements about his wish to ensure that all religious minorities in Iran are protected. We have made representations insisting on a fair judicial process for the 13 who have been arrested and for any charges against them to be publicised and brought to court. I welcome some of the balanced and favourable comments that have appeared recently in the Iranian press, criticising some of the people who have prejudged the guilt of those who have been arrested. It is important that they should have a fair and open trial.

Mr. Wyatt: As my hon. Friend the Member for Bolton, South?East (Dr. Iddon) has already said, there are serious problems in one part of the Palestinian area. The situation is incredibly difficult for the Palestinian authorities. What is the current state of discussions between our Government and the new Labour Government of Israel on illegal Israeli settlements?

Mr. Cook: As I have said, the new Government have not yet been formed, but I look forward to an early consultation with the Foreign Minister once he is appointed. We have already sought an early meeting with Mr. Barak. In the communications from our Government and from the European Union we have stressed the importance of making sure that settlement development does not proceed, because of the risk that it would make it difficult to bring both sides back to the negotiating table. The way forward on the peace process is through dialogue, not unilateral action.

Mr. Colman: I am sure that my right hon. Friend welcomes the commitment from Mr. Barak to withdraw all Israeli troops from Lebanon within the next 12 months. Of course, they were put there to stop the terrorist incursions and the missiles that were fired on to northern Israel. Will my right hon. Friend urge the Lebanese Government to ensure that when Israel withdraws—as it has from Jezzine—they take up their rightful role of policing the area to prevent the resumption of terrorist attacks on northern Israel?

Mr. Cook: My hon. Friend is quite right to say that, in the event of an Israeli withdrawal, there must be no security vacuum. I very much welcome, as I did last month following the election of Mr. Barak, the indication that he gave that he hoped to secure the withdrawal of Israeli forces from southern Lebanon within a year. I hope


that that timetable will prove possible. Progress on the Lebanese and the associated Syrian track will help to prevent any security gaps.

Mr. McNulty: My right hon. Friend's comment about Jewish communities throughout the middle east being part of the middle east peace process is welcome. Can he give me a little more reassurance on the plight of the 22 Iranian Jews arrested in Iran on trumped-up charges? While a commitment to free and fair trials is of course welcome, those people have had no visits in prison, they have no legal representation and their plight, and indeed that of the entire 25,000 Jewish population in Iran, must be a serious concern. What representations are we making?

Mr. Cook: We have made representations to the Government of Iran both on the need for legal representation and for due legal process. I can assure the House that we shall continue to do so. My hon. Friend touches on a wider issue also. It is a matter of concern that the Jewish population of Iran has fallen from about 100,000 to barely a quarter of that figure. That is testimony to the pressure that has been put on them. The Government condemn anti-Semitism wherever it occurs and we shall certainly remind the Government of President Khatami that we expect them to implement fully their commitment to protecting the rights of all religious minorities, including the Jewish community.

Sir David Madel: A cause of intense disagreement between Israel and Palestinian negotiators is the future of Jerusalem. Does the Foreign Secretary envisage Jerusalem becoming the capital of both Israel and an independent Palestinian state?

Mr. Cook: The hon. Gentleman is absolutely right. That is one of the most contentious elements within the peace process. That is why it was reserved to the final status talks. It would not be helpful for even the strongest well wisher of the peace process, such as the United Kingdom, to express a view on what should be the outcome of those final status talks, but we support—and helped to write—the Berlin declaration that called for the final status talks to begin as soon as possible. We believe that there is no reason why they could not be concluded with good will within a year. They would have to include an agreement on the future of Jerusalem.

Mr. James Clappison: Is the Foreign Secretary aware of the wide support in and outside the House for the sentiments expressed by the hon. Member for Salford (Ms Blears) regarding the members of the Jewish community arrested on trumped-up spying charges in Iran? They include a chief rabbi, teachers and other members of the religious community. Does the Foreign Secretary agree that this grisly spectacle does immense harm to Iran's standing in the world and that the elements in Iranian society that are responsible for it should bear that in mind?

Mr. Cook: As I have told the House, certain elements of Iranian society have expressed quite robust and strong views about those who have prejudged the guilt of the people who have been arrested. We insist that the Government of Iran should ensure proper observation and due legal process and proper legal rights for those

arrested. The Iranian Government would rightly expect that for any of their citizens that we arrested, as indeed they would expect that from Israel. It is right that the international community should remind Iran that they must treat the Jewish members of their own society in the same way.

Mr. John Bercow: In reflecting upon the peace process, will the Foreign Secretary acknowledge that the early general election in Israel was precipitated by the inherent instability of that country's so-called proportional representation voting system? If the right hon. Gentleman can bring himself to acknowledge that simple and salient fact, will he also acknowledge that a strong Government with a clear mandate would be a better negotiating partner in the region for the simple reason that they will be able to focus on the policy agenda and not the grubby struggle for seats around the Cabinet table?

Mr. Cook: At two successive Question Times I have welcomed the result of that election, therefore I would be unwise to criticise the basis on which it was secured. I simply invite the hon. Gentleman to reflect on whether the past two years' history of the peace process would have been any better had Mr. Netanyahu had a strong majority.

Mr. Michael Fabricant: Further to the question from the hon. Member for Putney (Mr. Colman) concerning the withdrawal of Israeli forces from southern Lebanon, is the Foreign Secretary aware of the generally held belief that President Assad is using Hezbollah as his proxy militia to fight the southern Lebanese army and Israeli forces in south Lebanon? To facilitate the withdrawal from southern Lebanon, will the Secretary of State endeavour to meet President Assad to try to impose on him some regulations, or at least to encourage him to withdraw his support for Hezbollah in Lebanon?

Mr. Cook: We retain strong dialogue with Syria. I have met President Assad, and I met the Syrian Foreign Minister recently. The Minister of State, my hon. Friend the Member for Ashfield (Mr. Hoon), is meeting the Syrian Foreign Minister tomorrow. We continue to press Damascus on these matters, but it will not be easy to secure the outcome that the hon. Gentleman seeks without progress on the Syrian track, on which Damascus, quite rightly, has its own legitimate views.

Mr. Ernie Ross: Everyone in this House would wish Prime Minister-elect Barak success in his coalition building, particularly as he seeks to include in the coalition those organisations that believe in the principle held by the previous Prime Minister of land for peace. If the new Government are to get off to a good start with the Palestinians, they must concentrate on freezing development of the settlements as a genuine sign that there is a determination to reach final status discussions on all outstanding matters. I welcome my right hon. Friend's comments, because unless there is a comprehensive peace that includes peace with Syria and Lebanon, there will be no peace in the region.

Mr. Cook: I reinforce my hon. Friend's point that if the peace process is to be successful, there must be progress on all its tracks, and not just on the Palestinian


track. He is right that nothing could do more to jeopardise this unique opportunity to get the peace process back on track than a continuation of the unilateral breach of the peace agreement by settlement building. It is a matter of regret that during the interregnum before the new Government take over, some are taking advantage by continuing settlement building. I hope that Mr. Barak will stand by his pledge not to be committed to those changes that have taken place without any democratic mandate from the people of Israel.

Oral Answers to Questions — Indonesia

Mr. Jim Cunningham: What plans his Department has to assist progress towards democracy in Indonesia; and if he will make a statement. [86577]

The Minister of State, Foreign and Commonwealth Office (Mr. Geoffrey Hoon): The United Kingdom Government have contributed more than £2 million in bilateral support for preparations for Indonesia's first genuinely multi-party democratic elections since 1955, in addition to our share of the £5.5 million EU contributions. Our support included voter education, projects by the BBC for local radio and by the Westminster Foundation for Democracy as well as technical assistance for domestic election monitors. We welcome the fact that the elections ran smoothly. We are considering what further opportunities there are to assist in the consolidation of democracy in Indonesia.

Mr. Cunningham: Does my hon. Friend agree that Britain has done a lot more over the previous two years to encourage democracy in Indonesia—and, in particular, to advance human rights and the rights of the people of East Timor—than the Conservative party did during its 18 years of government, when all it could think about was flogging weapons to that country?

Mr. Hoon: I am grateful to my hon. Friend for his observations. We welcome the prospect of consultation in East Timor in August. We hope that that will produce a proper and fair result for the people of that part of the world.

Mr. Crispin Blunt: Has the United Kingdom offered troops as part of any possible multinational force to oversee any transfer of sovereignty for East Timor away from Indonesia?

Mr. Hoon: It is important that the consultation should take place before there is any pre-judging of the result.

Oral Answers to Questions — Federal Republic of Yugoslavia

Mr. Nigel Griffiths: If he will make a statement on the United Kingdom's relations with the Federal Republic of Yugoslavia. [86580]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): The last Serb tank left Kosovo on Sunday, ahead of the deadline, and 19,000 KFOR troops have now been deployed across the whole of Kosovo, to guarantee its security and to protect against violence all its residents, both Albanian

and Serb. The whole House will want to record its deep regret at the loss of life of the two British soldiers who were killed making a school safe for the local people.
A civil administration has been authorised by the United Nations and is tasked with preparing a political settlement on the basis of the Rambouillet accords, which provide for an ambitious degree of democratic self-government, with a review of the future status of Kosovo after an interim period.
We are determined to make the defeat of ethnic cleansing in Kosovo a turning point for the whole region, and have launched a stability pact that offers its countries more open trade and faster integration with Europe. We hope that one day it will be possible for Serbia to join us as a partner in the modem Europe, but first its Government must abandon the policies of ethnic hatred that have brought poverty to the people of Serbia and a decade of violence to their neighbours.

Mr. Griffiths: I am going to Pristina and the surrounding area on Friday with aid workers from the Scottish charities Kosovo appeal. Will my right hon. Friend ensure that the Government of Yugoslavia co-operate fully in the aid effort to rebuild in Kosovo and elsewhere and abandon their disgraceful policy of ethnic cleansing, which has made the state a pariah?

Mr. Cook: I am happy to reassure my hon. Friend that the Government in Belgrade are now in no position either to pursue ethnic cleansing in Kosovo or to hinder the vital work of the relief agencies. Relief has already been supplied to those who were made homeless in Kosovo and the refugees have returned from their camps in very large numbers. That has been made possible only by the deployment of the international military force led by NATO. All hon. Members will have been moved by the pictures of Kosovo Albanians greeting the arrival of the soldiers with flowers and a spontaneous warm welcome that underlines the depth of the horrors from which they have been liberated.

Mr. John Wilkinson: I, too, pay tribute to the sacrifice of the two Gurkha soldiers who were so tragically killed.
May I press on the Foreign Secretary the need to move to a civil administration for Kosovo at the earliest possible date, so that the Kosovars themselves may be responsible for their democratic self-government and for the policing of their country, as it would be wrong for us to impose structures and a way of life on the country?

Mr. Cook: I am grateful to the hon. Gentleman for his tribute to the soldiers who gave their lives making Kosovo safe.
We have to be realistic about the civil administration: in the immediate future, the international community must accept an obligation to provide public administration, economic reconstruction and humanitarian relief to Kosovo, but the Security Council resolution clearly states that, over a period of time, that UN administration is expected to transfer its powers to Kosovars of all nationalities—Albanian and Serb alike—and ensure that Kosovo has a democratic Government. That is important for Kosovo and will send a strong message to Serbia, where the people have been denied proper democracy and


freedom of expression; they may find the model of a free society that we can create in Kosovo more attractive than what is offered by President Milosevic.

Mr. Jim Murphy: My right hon. Friend has correctly paid tribute to the Gurkhas who were tragically killed yesterday.
Are the British KFOR troops being encouraged to record what they witness and take statements from victims so that the information can be drawn together? Will he confirm that those records and eyewitness accounts will be admissible in any future war crimes hearings? If that is so, British troops will go down in history not only for securing a peace to protect the innocent but for securing the convictions of the guilty.

Mr. Cook: My hon. Friend touches on an important priority for our troops in Kosovo. As KFOR has moved forward, it has recorded and identified all sites of atrocities and mass graves. It has passed the information to the International War Crimes Tribunal and is fully co-operating with it in the investigation. Britain was the first nation to provide a police team to carry out that investigation. The team has been working for the past three days exhuming corpses from a mass grave at Veluka Krusa, which is a priority site because it is named in the indictment of President Milosevic as one of the atrocities for which he was ultimately responsible.
I spoke at the weekend to Judge Arbour, the special prosecutor for the International War Crimes Tribunal, and
I am pleased to report to the House that she much appreciated the assistance that Britain is giving and the full co-operation of KFOR.

Mrs. Cheryl Gillan: We should like to be associated with the remarks that the Foreign Secretary has made about the two Gurkhas—Royal Engineers—who lost their lives, and would add to the tributes that have already been rightly paid to them. We also wish to send our congratulations to Lieutenant-General Mike Jackson on the signing of the demilitarisation agreement.
Can the Foreign Secretary confirm that the demilitarisation agreement included a pledge by NATO to consider the formation of an army in Kosovo modelled on the US National Guard; that it permits the KLA to continue to wear uniforms and insignia for the next 90 days; and that it did not deny the KLA the right to self-defence, which is a sign of the on-going volatility in Kosovo? Under those circumstances, is the Foreign Secretary confident that the difficulties being caused by armed KLA patrols will cease immediately?

Mr. Cook: It would be a brave person who claimed that all violence in Kosovo will halt immediately, given the enormous disruption and the great violence and high emotions that have been visited on that province in the past three months. That said, we believe that the agreement that has been signed fully meets our objective of demilitarisation of the KLA; indeed, it proposes to do so in a shorter time scale than was envisaged in the Rambouillet accords, which gave the KLA 120 days in which to demilitarise.
The 90 days is not the point at which everything happens: it is the point at which everything is to be completed. For most of the intervening period, the KLA

will not be allowed to take weapons outside their designated camps. That is a sensible way forward which has provided for an understanding between both sides. It will also enable NATO to ensure that it knows where the KLA is, and that is helpful. Within the three-month period, the agreement will provide for full demilitarisation. It is our objective to ensure that the ceasefire is observed not just by one side but by both sides, and that the future of Kosovo will be brought about through the ballot box, not the barrel of the gun.

Oral Answers to Questions — India-Pakistan

Mr. Malcolm Savidge: What assessment his Department has made of relations between India and Pakistan; and if he will make a statement. [86581]

The Minister of State, Foreign and Commonwealth Office (Mr. Geoffrey Hoon): We remain deeply concerned by the fighting in the Kargil area of Jammu and Kashmir following armed infiltration across the line of control. We have called on Pakistan and India to respect the line of control. We have urged both countries to calm the situation, reduce tensions between them and ensure that the conflict does not escalate further. We welcomed the talks between the Indian and Pakistani Foreign Ministers on 12 June. We hope that the dialogue will continue and that early progress will be made to end the fighting.

Mr. Savidge: Will the Government exert all possible influence to try to reduce the risks of a nuclear conflict that could devastate the subcontinent and beyond?

Mr. Hoon: That is precisely why we have urged both countries to implement United Nations Security Council resolution 1172 and, in particular, to sign the comprehensive test ban treaty, cease the production of fissile material and refrain from deploying nuclear weapons and delivery systems.

Oral Answers to Questions — South Africa (Elections)

Mr. Desmond Browne: What discussions he has had with the South African Government about the outcome of the recent elections there. [86582]

The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): My right hon. Friend the Prime Minister telephoned Thabo Mbeki on 7 June to congratulate him on the ANC's victory and on the peaceful conduct of the elections. Those elections have been a resounding success. The high voter turn-out and generally efficient conduct of these elections have further strengthened the democratic process in South Africa.

Mr. Browne: I thank my hon. Friend for that reply. Does he agree that the continued success of democracy in South Africa will largely depend on how able its Government are to deal with the monstrous problems they face, including massively increased crime, the spread of AIDS and endemic poverty and unemployment? Will he confirm that this Government have as foreign policy priorities an increase in trade, the continued sharing of


technology, continued private investment and—most importantly—the strengthening of civil society in South Africa?

Mr. Lloyd: My hon. Friend is absolutely right. The priorities that he has set out are those adopted by the South African Government. From the Government's point of view, the increase in bilateral trade and in trade between the European Union and South Africa was fundamental. That is why we were at the forefront of ensuring that the EU moved forward on a free trade agreement with South Africa.
My hon. Friend raised the very important issue of HIV/AIDS. About 3 million South Africans are HIV positive. When he was in South Africa earlier this year, my right hon. Friend the Prime Minister announced an assistance package of £100 million, targeted on that problem. However, in all our dealings with South Africa we shall continue to give support to the democratically elected Government, who are committed to tackling the major priorities involved in improving the economic and social structure for all South Africans. That is a welcome change from previous South African Governments.

Oral Answers to Questions — Sierra Leone

Mr. David Heath: What assessment he has made of the current situation in Sierra Leone. [86584]

The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): We welcome the recent signing of a ceasefire agreement and the negotiations currently taking place in Lomé. We urge all those involved to seize this opportunity to secure a sustainable peace and to end Sierra Leone's appalling cycle of violence.

Mr. Heath: The Minister might have been forgiven if he had suggested that interest in Sierra Leone had diminished a little in this House since last year, but it remains a very important matter. Has the Minister had any discussions with President Obasanjo of Nigeria to secure assurances that Nigeria will maintain stability over the next crucial few months while the peace process is worked out?
Given the tragic humanitarian disaster that has overtaken Sierra Leone, which has 400,000 refugees and 1 million displaced persons within its borders, will the Minister say whether any further progress has been made on the EU's projected $30 million aid programme?

Mr. Lloyd: The hon. Gentleman is right to say that, sadly, the House's interest in Sierra Leone seems to have diminished, but the tragic reality of the country was never reflected in the rather partisan, party-political debate here in Westminster.
It is important to pay tribute to the role of ECOMOG—and to Nigeria's role within it—in stabilising the situation in Sierra Leone. Nigeria has worked enormously hard, and its nationals have died in the stabilisation struggle. We have worked closely with Nigeria and ECOMOG, and President Obasanjo has maintained his commitment to ensuring that Nigeria will finish the job that it started and that ECOMOG will play its part.
I cannot tell the hon. Gentleman the exact state of progress on the EU's projected aid programme, although I shall respond in due course with that information. However, the Government retain their dual commitment to ensuring that we win in this period of conflict by maintaining progress towards peace, and to ensuring that we win the peace, too. That will involve investment after the conflict has ended.

Mr. Ian Davidson: Will the Minister expand on the matter of the humanitarian aid that we are providing to Sierra Leone, and on the aid that we are providing to help rebuild civil society there? It is not enough to provide foodstuffs and materials; civil society must be reconstructed. What are the Government doing in that regard?

Mr. Lloyd: My hon. Friend asks a very important question. A real effort has been put into giving humanitarian aid. We have given some £3.5 million since the beginning of this year, when the most recent rebel incursion into Freetown occurred. Nevertheless, the bulk of the assistance made available—in the order of £20 million—is for different forms of reconstruction assistance. The aim in part is to demobilise those engaged in combat, and also to reconstruct civil society and ensure that there is an economic base on which peace can be founded. That is the most profound and important commitment that we can make.

Oral Answers to Questions — Mongolia

Mr. John Grogan: If he will make a statement concerning the Government's policy towards Mongolia. [86585]

The Minister of State, Foreign and Commonwealth Office (Mr. Geoffrey Hoon): Britain enjoys a very warm relationship with Mongolia. We have fully supported Mongolia's transition to democracy, and we commend the Mongolian Government's commitment to achieving a market economy. Our educational and cultural links are strong, and bilateral trade, though modest, has real potential to increase. We hope that the relationship will continue to develop in all areas.

Mr. Grogan: Does my hon. Friend recognise the tremendous achievement of the people of Mongolia, whose national hero is, incidentally, Ghengis Khan? The country borders China but has established a flourishing multi-party democracy in under a decade. The Foreign Office is represented at a donor conference taking place in Ulan Bator; but will my hon. Friend do all he can to support bilateral links between the UK and Mongolia and to encourage our European Union partners to support Mongolia?

Mr. Hoon: I know that my hon. Friend is something of an expert on Mongolia, which, unlike me, he has visited. I hope to visit that part of the world as part of my responsibilities. The Government hope to foster and develop the existing good relationship between the UK and Mongolia.

Mr. Ian Bruce: I am sure that the House, which is highly knowledgeable about Mongolia, is aware that the western-oriented Government of Mongolia are not keen to become to close to China—except geographically. When the Minister visits Mongolia, will he attempt to improve our trade and investment links? Given his previous responsibility for the internet, will he explore the ease with which all members of the Mongolian Government can be contacted. It is considerably easier to reach them on the internet than it is to contact UK Foreign Office Ministers.

Mr. Hoon: The hon. Gentleman is certainly right that there is a good relationship between the two countries, not least because the UK was the first western country to establish diplomatic relations with Mongolia, setting up an embassy in 1963. Mongolians have not forgotten that signal of support, and the UK has a consequently advantageous position. I have not recently surfed the internet in an effort to contact my counterparts in Mongolia.

Oral Answers to Questions — Nigeria

Mr. Bob Blizzard: If he will make a statement on the readmission of Nigeria to the Commonwealth. [86588]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): I visited President Obasanjo after his election to congratulate him on Nigeria's return to democracy. I pledged Britain's support for the return of Nigeria to the Commonwealth, and I am delighted that we were able to secure that in time for his inauguration last month.
An immense task remains to be done in repairing the damage done to Nigeria's economy and society in the dark days of General Abacha, a tragic case from which time affects one of my hon. Friend's constituents. However, the new Government have made a good start, and they will have a firm ally in Britain.

Mr. Blizzard: I thank my right hon. Friend for that answer. Does he consider it acceptable that a Commonwealth country should continue to fail to communicate properly with the UK high commission? My constituent was murdered in Nigeria more than a year ago. Despite requests at the highest level for the release of the police report and promises by the Nigerian authorities that that would be done by a certain date, the report, which exists—I saw it on the police commissioner's desk when I visited Nigeria—remains unforthcoming. Will my right hon. Friend make it clear that Nigeria should observe the basic consular decencies expected of a Commonwealth country in this case and in others?

Mr. Cook: I congratulate my hon. Friend on his resolve and determination in pursuing his constituent's case, even to the extent of visiting Nigeria. I do not believe it acceptable that any country should fail to respond, whether or not it is in the Commonwealth. President Obasanjo faces the major task of reforming and modernising the Nigerian police. He has begun by appointing a new inspector-general, on whom our consul

called last Wednesday to raise my hon. Friend's constituent's case. I hope that we may soon receive the response that we have been seeking for some time.

Rev. Martin Smyth: I welcome the Secretary of State's positive endorsement of the new Government in Nigeria. We wish them well because we understand their difficulties. At the same time, I believe that they already have support right across the community, which I trust will develop strongly so as to restore Nigeria to its proper place in the Commonwealth.

Mr. Cook: When I discussed his plans for the future with President Obasanjo, when he was elected but not yet in office, I was impressed by the stress that he placed on reconciliation among the many communities that make up the state of Nigeria. Since then, he has carried that forward, particularly by his work in the Delta region, meeting community leaders and seeking a positive understanding. That is an alternative to the random violence in the Delta, and he will have our full support in his efforts, which will also enable us to welcome Nigeria to its rightful place as a leading African nation in the international community.

Mr. Nicholas Soames: While welcoming the progress in Nigeria, will the Foreign Secretary when he next talks to the Nigerian Government mention our great concern about the amount of financial fraud involving our countries? I have two constituents who have been terribly defrauded—one of them bankrupted—by major Nigerian fraud for which there is no recourse and no possibility of ever recovering the money. Will he ask the Nigerians what they can do to tighten the regulations that allow such fraud to be so commonplace?

Mr. Cook: I am pleased to assure the hon. Gentleman that we have already raised that issue with the Government of Nigeria and will continue to work them. I am well aware of the scale of the problem. It is a striking example of how after a break-down in a country's law and order and a failure to have a functioning central Government, as happened under General Abacha, the ripple effects spread around the international community. We hope that we can work with the new Government at least to reduce, and perhaps eliminate, the problem.

Oral Answers to Questions — Overseas Territories (Legislation)

Mr. Bob Russell: What action he has taken since the publication of his White Paper on overseas territories to prepare for the introduction of the legislation. [86590]

The Minister of State, Foreign and Commonwealth Office (Mr. Tony Lloyd): Action to prepare a brief for an overseas territories Bill is under way. It is proposed that the legislation will cover three areas: changes to relevant legislation to reflect the new title of United Kingdom overseas territories; the offer of British citizenship to British dependent territories citizens; and minor constitutional changes. We intend to place legislation before Parliament at the earliest opportunity possible.

Mr. Russell: So far, so good. Does the Minister accept that the sense of betrayal in the overseas territories is the same today as it was 18 years ago when full British citizenship was withdrawn by the Conservative Government? While I welcome his proposals, he did not mention the time scale. Does he accept that unless the Government introduce early legislation, the sense of betrayal will continue?

Mr. Lloyd: I do not accept that the sense of betrayal is still there. In fact, throughout the overseas territories there has been a warm welcome for the Government's positive tone. I pay tribute to the hon. Gentleman, who has valiantly fought this case over more than a few months. There is no doubt that the people of the overseas territories know that the injustice that they felt is in the process of being lifted. They welcome that, and our commitment is that it will happen.

Mr. Tam Dalyell: On the British Indian Ocean territory, can something be done to help those wretched people who were shoved off their archipelago to make way on Diego Garcia for the biggest American base outside the continental United States? With the welcome seminar on reefs to be held at the Foreign Office next week, can something be done to protect their fishing grounds?

Mr. Lloyd: As my hon. Friend knows, there is a long and complex history to the position of the former residents of Diego Garcia. It is not a straightforward question. The issue has been resolved, returned to and re-resolved. While we have considerable sympathy for the plight of individuals, in every case the families of those moved from Diego Garcia received a compensation package. The overwhelming majority are citizens of Mauritius and are therefore not in the same position as residents of the overseas territories, who will now benefit by being given full British citizenship.

Mr. Nicholas Winterton: As I am chairman of the Falkland Islands group and an active member of the Gibraltar group, the Minister will appreciate my interest in the answer that he gave the hon. Member for Colchester (Mr. Russell). Will he assure me and the House that the people of the Falklands, Gibraltar and the other overseas territories will be treated fairly? Will the Minister assure me that the people of Gibraltar will be given the same rights as the people of the overseas territories of France, who are able to vote in the European elections?

Mr. Lloyd: The fundamental guarantee that the people of Gibraltar, the Falklands and all the overseas territories seek and have received is that sovereignty will not be transferred without their express and declared approval. The hon. Gentleman raises the question of the right of the citizens of Gibraltar to take part in the European elections. I think he knows that the British Government have worked and will continue to work hard to guarantee that they obtain precisely that right.

Oral Answers to Questions — European Union (Reform)

Ms Gisela Stuart: If he will make a statement on the plans to reform the decision-making process of the European Union. [86591]

The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): The Cologne European Council decided that an intergovernmental conference should begin early next year to prepare the Union's institutions for enlargement.
The conference will cover three main subjects—the size and composition of the Commission, the weighting of votes in the Council and the possible extension of qualified majority voting. The Government welcome this timetable. We want European institutions that are effective, efficient and able to face up to the challenges that enlargement will bring.

Ms Stuart: I thank the Minister for that answer. We should never forget that it was the previous Government who allowed the culture of mismanagement to fester in the European Commission. I welcome this Government's commitment to reform it. May I urge the Minister to focus not only on a clear agenda but on the speed of its implementation, which is equally vital in view of the imminent enlargement?

Ms Quin: I agree with my hon. Friend that speed is important in this exercise and that we must apply ourselves to it assiduously. It is 10 years now since the Berlin wall came down and countries in central and eastern Europe have made a great deal of progress. We want to be able to welcome them into membership or closer association with the European Union. It is very important to us to keep that role firmly in mind.

Mr. Archie Norman: rose—

Hon. Members: Hear, hear.

Mr. Norman: Thank you, Madam Speaker. Does the Minister agree that the principle of subsidiarity in European decision making can be safeguarded only if national Parliaments have adequate time to scrutinise legislation? Is she aware of the real disquiet around the fact that in the past year on no fewer than 23 occasions the six-week time window agreed under the Amsterdam treaty for scrutiny of legislation has not been observed to the full? Will she undertake with her European counterparts to ensure that in future the time window is more precisely defined and that it is properly observed for all European legislation?

Ms Quin: I congratulate the hon. Gentleman on his appointment. Like me, he was perhaps wondering whether he would be able to get to the Dispatch Box this afternoon. We are pleased with the arrangements that we have introduced for scrutiny, which are recent. We hope and expect that they will work well. We know that sometimes the pace of European business means that decisions get speeded up, but the Government have in all cases provided full explanation. Far from being aware of disquiet, I am very much aware of the widespread welcome in both Houses for the way the Government are approaching the issue.

Oral Answers to Questions — MOX Shipments

Mr. David Chaytor: What representations have been made to him by Caribbean states over the proposed shipment of MOX fuel to Japan. [86592]

The Minister of State, Foreign and Commonwealth Office (Mr. Geoffrey Hoon): I am aware of the interest of the Caribbean states in this issue. While no specific representations have been made to me by Caribbean states over the proposed shipment of MOX fuel to Japan, I have received a letter from the high commissioner of the Bahamas on behalf of his Commonwealth Caribbean colleagues requesting a meeting to discuss the more general issue of the movement of nuclear material through the Caribbean sea. Arrangements are in hand to hold such a meeting.

Mr. Chaytor: I thank my hon. Friend for that reply. Does he accept that there is continuing concern about the safety, security and proliferation implications of the international transport of MOX fuel? Does he accept that that is partly because for many years the nuclear industry insisted that MOX fuel could not be chemically separated into its constituent element of uranium and plutonium, whereas many scientists challenged that view and pointed

out that it was a fairly routine scientific process for any terrorist group that had access to a university chemistry laboratory?
Is my hon. Friend aware that in documents published within the past few days by the Department of the Environment, Transport and the Regions and relating to the Department's latest round of consultation on the Sellafield MOX plant, the possibility of separating plutonium from MOX fuel has been confirmed? Will he assure the House that he will keep the safety, security and proliferation aspects of the transport of MOX fuel under the closest scrutiny?

Mr. Hoon: I can give my hon. Friend that assurance. I realise that there is concern about safety. I assure him that the solid nature of MOX itself, the integrity of the cask in which it is transported and the safety features of the ships mean that there is no credible accident scenario in which radioactivity could be released. With the benefit of my general science grade 5 O-level, I shall not argue with him as to the technicalities of the extraction of plutonium. I accept that that is theoretically possible, but I assure him that I am instructed that it would require a complex and highly specialised piece of equipment, and plant and skills, to achieve it. A considerable degree of nuclear sophistication would need to be available before what my hon. Friend describes could happen.

Points of Order

Mr. John Bercow: On a point of order, Madam Speaker. Have you, with your beady eye, noticed—as I did—that during much of Question Time today, including its start, our faithful friend, the clock, has been running one minute ahead of the time on the Annunciator screen? The effect of that was to lead me and several of my hon. Friends, quite wrongly, to believe that we were starting Question Time a minute late. I am glad that I was corrected by my faithful and hon. Friend the Member for New Forest, East (Dr. Lewis). Can the matter be speedily rectified?

Madam Speaker: I shall look into the matter; my beady eye had not noticed it.

Mr. Ian Bruce: On a point of order, Madam Speaker. Some of my constituents took a great deal of time and trouble to put a petition to the House on the banning of hunting with hounds. I am sure that you realise, Madam Speaker, that I am not in favour of that petition, but, like any representative Member, I submitted it on behalf of my constituents. Some weeks later, I was somewhat surprised to receive a note from the Clerk who deals with petitions, stating that the Home Office had been notified of the petition, but had decided not to make any comment. Surely it is strange, when our constituents submit a petition on an issue that concerns them and that is the responsibility of the Government, for the Minister and the Department responsible to say that they have no comment. It is an abuse of our system if we cannot have answers from the Executive on matters of concern to our constituents.

Madam Speaker: The correct procedure has been followed; not all petitions are responded to. I can assure the hon. Gentleman that the procedure has been carried out. If he does not approve of it, he has an opportunity to try to change it through the Procedure Committee. The procedure that he has reported to me is absolutely correct.

Parliamentary Control of the Executive

Mr. David Davis: I beg to move,
That leave be given to bring in a Bill to make the exercise of certain powers of Ministers of the Crown subject to control by the House of Commons.
In 1977, the Procedure Committee concluded that:
The balance of advantage between Parliament and Government is so weighted in favour of Government that it is inimical to the proper working of our parliamentary democracy.
About 20 years later, an NOP survey of Members of Parliament, showed that three quarters of them believed that that was still the case; a number of Members thought that it had become worse. It is a truth that has become sharper in every passing decade since the 1930s.
In the 1940s, the massive increase in the size of the Government as a result of the second world war dramatically shifted the balance of power between Whitehall and Westminster to the huge advantage of Whitehall. Over the years, that imbalance in Whitehall's favour has got worse. Even action taken with good intentions—such as improving public services through the creation of Government agencies—has had the perverse effect of making much of the Government less accountable to Parliament and reducing Parliament's access and power.
In the ensuing decades, many changes worsened that imbalance. The starkest was the effect of the growing power of the European Union. More and more of Britain's legislation is negotiated in Brussels, often out of sight, in technical Committees or at the meeting of ambassadors known as COREPER, at which the details of important legislation are negotiated without the presence of a single elected representative. The final result—which is often unamendable—is presented for Parliament's rubber stamp.
Similarly, in Britain today, one of the most important levers of economic policy—the decision on interest rates—is made out of sight and largely out of reach of Parliament by members of the Monetary Policy Committee. Those are just a few examples of areas where Parliament has lost control of policy matters that are
Enormously important to our citizens.
There are three primary aspects of government where parliamentary scrutiny and control are either absent or inadequate. They are: first, the exercise of unfettered Executive power, largely under Crown prerogative; secondly, the control of information that should often be available to the public, and which should certainly be available to Select Committees of the House; and, finally, the prioritization and control of expenditure within Departments.
I shall deal first with the powers largely exercised under Crown prerogative. I am agnostic about the virtues of European central bank independence Union decision making. However, it strikes me as extraordinary that Parliament has no say not only in the decisions, but in who makes them. Of course, the appointment of people such as the European Commissioners, ambassadors to international organizations and members of powerful bodies such as the Monetary Policy Committee is a part of the patronage that any Executive guard jealously. That is wrong. The fact that such people are appointed solely by Government


without any parliamentary oversight is bad for democracy. Power corrupts, but patronage corrodes—corrodes democracy, public trust and confidence, and the mechanism of government itself. That is one of the things that the Bill sets out to correct.
Executive decisions by the Government should be subject to the scrutiny and approval of Parliament in many other areas. Much of them arise under Crown prerogative—which, in truth, in modern Britain is a euphemism for the prerogative of the Prime Minister. The Bill sets out to curb that and to make it subject to parliamentary approval, giving Parliament the right of approval over all Executive powers not conferred by statute—from the ratification of treaties to the approval of Orders in Council, and from the appointment of European Commissioners, some ambassadors, members of the Bank of England's Monetary Policy Committee and other senior public posts to the dissolution of Parliament. There is no serious reason why the Executive should have the monopoly of control of these issues—they do not have that power in most other modern democracies.
However, that proposal is not enough. The exercise of unchecked governmental power is not the only serious problem with our democracy—even with a Government with a huge majority. Parliament must concern itself with two other elements: the control of information and the control of money. Governments protect their monopoly over those two areas almost as fiercely as they defend their monopoly on Executive power.
The Government's proposed Freedom of Information Bill will improve only slightly the position regarding Parliament's access to information. My Bill creates the post of parliamentary investigating officer who, like Parliament's Comptroller and Auditor General, would be cleared to have access to all levels of Government information, whether secret or not. Such an officer would serve the House and its Select Committees. When we next have an inquiry such as the Sierra Leone inquiry, it could be conducted by Parliament's own official and Parliament would not have to swallow the Government's protestations about the "independence" of an inquiry run by a civil servant.
Like the Comptroller and Auditor General, the investigating officer would be able to test on behalf of Parliament the Government's claims within the veil of

Whitehall secrecy, and would also be able to make an independent judgment about whether that secrecy was necessary. By this simple mechanism, Parliament would penetrate the veil of secrecy without jeopardising the real concerns of national security, commercial confidentiality or personal privacy.
Finally, the control of money—or supply—was the original function of the House. Unfortunately, in the second half of this century, the so-called estimates procedure has become a disgraceful charade. The documents are opaque, the procedure is arcane and the outcome is irrelevant.
My Bill will require the approval of the relevant departmental Select Committee before a departmental estimate is approved. It will specifically allow the Select Committee to lay an amendment before the House altering the allocation of money within a Department, but not increasing the total for the Department. That will allow Parliament to challenge and debate spending priorities, without undermining the ability of the Government to manage the economy.
That apparently small change will transform the relationship between Parliament and the Government—and, incidentally, will transform the relationship between Ministers and civil servants on matters of financial priority—and it will, for the first time, introduce real accountability into the financial priorities of modern politics.
If enacted, this small Bill will irrevocably alter the relationship between Parliament and the Executive, and in doing so, will at least check the trend from representative democracy to presidential oligarchy, which is so sadly undermining this great institution.
Question put and agreed to.
Bill ordered to be brought in by Mr. David Davis, Mr. Robert Maclennan, Mr. David Maclean, Mr. Tony Benn, Mr. Derek Foster, Mr. Douglas Hogg and Mr. Eric Forth.

PARLIAMENTARY CONTROL OF THE EXECUTIVE

Mr. David Davis accordingly presented a Bill to make the exercise of certain powers of Ministers of the Crown subject to control by the House of Commons: And the same was read the First time; and ordered to be read a Second time on Friday 23 July, and to be printed [Bill 123].

Orders of the Day — TAX CREDITS BILL AND ACCESS TO JUSTICE BILL [Lords] (PROGRAMME)

Ordered,

That the following provisions shall apply to—

(a) proceedings on consideration of Lords Amendments to the Tax Credits Bill,
(b) proceedings on the Motion in the name of Mrs. Barbara Roche relating to Access to Justice Bill [Lords] [Ways and Means], and
(c) Consideration and Third Reading of the Access to Justice Bill [Lords].

1.—(1)The proceedings to which this Order applies shall be taken in the order specified in the Table.

(2) Each part of the proceedings to which this Order applies shall, if not previously concluded, be concluded today at the times shown in the Table.

Table


Proceedings
Conclusion


Tax Credits Bill: Consideration of Lords Amendments



Amendment 1
5.30 p.m.


Amendment 2
6.30 p.m.


Remaining Amendments
7.00 p.m.


Motion on Access to Justice Bill [Lords][Ways and Means]
7.15 p.m.


Access to Justice Bill [Lords]: Consideration and Third Reading



New Clauses and amendments relating to Part I
8.45 p.m.


Government new Clauses and new Schedule
10.15 p.m.


Remaining new Clauses
11.00 p.m.


Remaining amendments and Motions, and Third Reading
Midnight

Orders of the Day — Conclusion of proceedings on Tax Credits Bill

2.—(1) This paragraph applies for the purpose of concluding any proceedings on consideration of Lords Amendments to the Tax Credits Bill in accordance with paragraph 1.

(2) The Speaker shall first put forthwith any Question already proposed from the Chair and not yet decided.

(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—

(a) the Question on any further amendment of the Lords Amendment moved by a Minister of the Crown, and
(b) the Question on any Motion made by a Minister of the Crown, That this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(4) The Speaker shall then put forthwith—

(a) the Question on any Amendment moved by a Minister of the Crown to a Lords Amendment, and
(b) the Question on any Motion made by a Minister of the Crown, That this House agrees or disagrees to the Lords Amendment or (as the case may be) to the Lords Amendment as amended.

(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown, That this House disagrees to a Lords Amendment.

(6) The Speaker shall then put forthwith the Question, That this House agrees to all the remaining Lords Amendments.

(7) As soon as the House has agreed or disagreed to a Lords Amendment, or disposed of an Amendment relevant to a Lords Amendment which has been disagreed to, the Speaker shall put forthwith a separate Question on any other Amendment which is moved by a Minister of the Crown and relevant to the Lords Amendment.

(8) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons and the appointment of its Chairman.

(9) A Committee appointed to draw up Reasons shall report before the conclusion of this day's sitting.

Orders of the Day — Conclusion of proceedings on Access to Justice Bill [Lords]

3.—(1) This paragraph applies for the purpose of concluding any proceedings on the Access to Justice Bill [Lords] in accordance with paragraph 1.

(2) The Speaker shall forthwith put the following Questions (but no others)—

(a) any Question already proposed from the Chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment moved or Motion made by a Minister of the Crown; and
(d) any other Question necessary for the disposal of the business to be concluded.

(3) On a Motion made for a new Clause or a new Schedule, the Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(4) If two or more Questions would fall to be put under sub-paragraph (2)(c) on amendments moved or Motions made by a Minister of the Crown, the Speaker shall instead put a single Question in relation to those amendments or Motions.

Orders of the Day — Common provisions

4.—In the case of any proceedings to which this Order applies—

(a) Standing Order No. 15(1) (Exempted business) shall apply;
(b) Standing Order No. 82 (Business Committee) shall not apply;
(c) the proceedings shall not be interrupted under any Standing Order relating to the sittings of the House;
(d) no dilatory Motion with respect to, or in the course of, the proceedings shall be made except by a Minister of the Crown (in which case the Question on the Motion shall be put forthwith);
(e) if the proceedings are interrupted by a Motion for the Adjournment of the House under Standing Order No. 24 (Adjournment on specific and important matter that should have urgent consideration) a period equal to the duration of the proceedings on the Motion shall be added to the period allowed for the interrupted proceedings; and
(f) if the House is adjourned, or the sitting is suspended, before the proceedings are concluded no notice shall be required of a Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order.—[Jane Kennedy.]

Orders of the Day — Tax Credits Bill

Lords amendments considered.

Madam Speaker: I draw the House's attention to the fact that privilege is involved in Lords amendment No. 4. If the House agrees with that Lords amendment, I shall ensure that the appropriate entry is made in the Journal.

Clause 6

PAYMENT OF TAX CREDIT BY EMPLOYERS ETC

Lords amendment: No. 1, in page 3, line 31, at beginning insert ("Subject to subsection (1A),")

The Paymaster General (Dawn Primarolo): I beg to move, That this House disagrees with the Lords in the said amendment.

Madam Speaker: With this, it will be convenient to discuss Lords amendment No. 3.

Dawn Primarolo: The amendments together would allow employers with fewer than 10 employees to elect that any tax credit payable to their employees should be paid by the Inland Revenue board. The amendments would also enable regulations to be made governing the making and revoking of such elections.
The amendments were introduced in Committee in another place. This House has, of course, debated and firmly rejected similar amendments seeking to exempt various categories of employers from paying tax credits through the payroll to their employees. I shall ask the House to reject amendments Nos. 1 and 3, because they are ill thought out, would be disastrous for the tax credit policy as a whole and would be an administrative nightmare.
There are two important points to make on the policy implications of the amendments. First, as their lordships are well aware, payment via the employer is central to our tax credit policy. It will be vital in showing unambiguously that work really does pay. Not only will the tax credits be much more generous than the benefits that they replace, but they will also be inextricably linked to the rewards of work because they will be shown on the employee's pay slip as an addition to the net take-home pay. Embedding the tax credits in the tax system will help to break the perceived link with benefits and will reduce the stigma which is often attached to claiming in-work support.
For those reasons, we should not be looking for ways of taking large numbers of employers out of the scheme, thereby depriving many thousands of employees of their right to receive their tax credit through the payroll. Payment through the pay packet will be the predominant method of payment from April 2000, and we want that to apply in every case where it is appropriate and practical.

Mr. Steve Webb: How many employees, not firms, would be taken out of payment through the pay packet by the amendments?

Dawn Primarolo: I shall answer the hon. Gentleman's point when I explain why I am asking the House to reject the amendments.
The second, more general, point of policy is that amendments Nos. 1 and 3 would give employers the right—

Mr. Eric Pickles: Will the hon. Lady give way?

Dawn Primarolo: I am happy to give way, but will the hon. Gentleman confirm that the Opposition's policy is still as stated by the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith)—that a Conservative Government would abolish the working families tax credit and deprive millions of children of the benefits of that?

Mr. Pickles: The hon. Lady is most courteous, but I seek only to help her out. Can she confirm that the amendments would take out only 13 per cent. of people, and that 87 per cent. would still be able to receive the working families tax credit through the wage packet?

Dawn Primarolo: I am coming to my second point which deals specifically with the hon. Gentleman's question, and with the removal of so many employers from their responsibilities within the tax system.
Amendments Nos. 1 and 3 would give employers the right to opt out of their tax obligations. That is a novel idea. If it were a feature of the tax system generally, I wonder how many employers would, for example, voluntarily operate the pay-as-you-earn scheme.
To remove employers in such large numbers from their tax obligations—70 per cent. of all employers—is clearly unacceptable. Tax credits are part of the tax system, and it is completely unacceptable to say that employers can elect not to fulfil their tax administration responsibilities.
By accepting the amendments, the House would give in the region of 825,000 employers—70 per cent. of all employers—the ability to elect not to carry out their duties in relation to tax credits. That is not acceptable.

Mr. Webb: The hon. Lady will know that the Government have said that the smallest firms, those that do not have a PAYE or national insurance liability at present, do not have to deliver the tax credits directly through the payroll, and that they can be paid directly to the recipient. Those small firms are not giving up on their duties—rather, the Government have recognised that they are a burden on them, so why is the argument different?

Dawn Primarolo: If the hon. Gentleman will be a little more patient, I shall address those points, which were a feature of our debates in this House and in the other place.
I was making the point about the number of employers who would be removed from the scheme. In his first intervention, the hon. Gentleman asked about the number of employees involved. The figure is in the region of 100,000, which is a substantial number to remove from the scheme. His second intervention was about employer burdens and what will happen to those employers who are not required to be in the PAYE scheme. If I may go on to the next section of my remarks, I shall be able to deal with that point.
The main criticism of employer payment of the tax credit concerns the method of payment imposed and unacceptable burdens, although I note that today's Confederation of British Industry press release welcomes and
supports the Working Families Tax Credit which should play a key role in raising incentives to work by targeting additional resources on those people who are most likely to suffer from the poverty and unemployment traps".
I am sure that we all have a copy of the press release, which points out that
the CBI welcomes the government's recognition
of the issues in respect of the cost of compliance and
looks forward to working with the government to develop proposals to meet the needs of smaller firms.
I should say that I will deal with that point during my speech, in case any hon. Members think that I might miss it out.

Mr. Pickles: rose—

Dawn Primarolo: I am always pleased to give way to the hon. Gentleman, but I should be grateful if, in return, he would answer my question: does his party support the working families tax credit—yes or no?

Mr. Pickles: I am sure that it was for the sake of brevity that the hon. Lady missed out the paragraph of the CBI press release that states:
We would have preferred smaller firms to have been exempt from administering the credit".
Does she believe that Lord Haskins, who has been asked to look into this matter by the Prime Minister, is wrong when he says that the Government have underestimated the impact of the working families tax credit on small businesses?

Dawn Primarolo: Shall I take the hon. Gentleman's answer as yes—his party intends to repeal the working families tax credit, denying millions of children and families the support that it gives? He is quite right; I do not deny that the CBI would have preferred different action, but it is saying that, despite its concerns about employer compliance, it accepts that the Government recognise that something will need to be done in that area and that we will respond. It is not opposing the Bill; it welcomes the Bill. If employer compliance is such an overwhelming problem, one would have expected the CBI to feel unable to support the Bill.

Mr. John Bercow: Will the hon. Lady give way?

Dawn Primarolo: As always, I am happy to give way to the hon. Gentleman, but then I must try to make progress, if he will permit me.

Mr. Bercow: I am exceptionally grateful to the Paymaster General for giving way. On the subject of opponents of Government policy in this area, is she aware that the National Farmers Union is resolutely opposed to the current position because the great majority of agricultural businesses would be adversely affected? Given that she is flagging up her willingness to consider means by which to alleviate the burden on small

businesses, is she prepared sympathetically to consider the NFU request that the new measure should be delayed for two years to allow agricultural businesses adequately to prepare themselves for it?

Dawn Primarolo: The Government are not prepared to delay the implementation of that policy because we are not prepared to stand by and watch as millions of children who could be assisted by the measure continue to be trapped in poverty. We have made it clear—and the CBI recognises this—that tackling compliance cost is being addressed; on that basis, it supports and welcomes the Bill.
The Government have recognised from the outset that employers will incur some extra costs in paying tax credits through the payroll, and we are doing everything possible to keep those extra costs to a minimum. Since May 1998, we have been consulting representatives of employers and payroll software suppliers on the details of the scheme, and significant changes have been made to meet their concerns.
We have also recognised that, whatever the advantages of employer payment of tax credits, that method of delivery may not be appropriate in all cases. As the hon. Member for Northavon (Mr. Webb) pointed out, some employers are so small that they are not required to comply with PAYE arrangements. We have already announced an exemption for certain very small employers, in whose case the advantages to employees of receiving their tax credit with pay would clearly be outweighed by the practical difficulties. A line must be drawn somewhere, and the Government have drawn it at that point, given that those employers will not be participating in the PAYE scheme.
Employers will normally offset tax credit payments against PAYE tax payments, national insurance contributions and student loan repayments that they are due to make to the Inland Revenue. If their liability to the Revenue is not enough to cover the tax credit payments that they are required to make, they will be able to apply to the Revenue in advance for funding. That was discussed extensively during earlier stages of the Bill's passage.
What are we to do about employers who do not operate a PAYE scheme, because they do not have to deduct tax or national insurance contributions from the pay of their employees? Employers in that category would include people who employ a cleaner or gardener for a few hours a week. They currently have no dealings with the Revenue in their role as employers. For those employers, the burden of paying tax credits with pay would be disproportionate, because they would be brought on to the Revenue's employer database simply through once having had tax credit recipients on their payroll. They would have to apply to the Revenue for funds on that basis, because they would not be able to make deductions from the payments that they were collecting on behalf of the Revenue.
In Committee, we announced that we had decided to exempt employers from paying tax credits through the payroll if they did not operate a PAYE scheme. That was an entirely reasonable move, and was welcomed as such. It is a targeted exemption, which will take about 80,000 employers out of the scheme. I am anticipating a possible further intervention from the hon. Member for


Northavon. The exemption will be relatively easy to operate, because the Revenue's PAYE database will quickly confirm whether a particular employer qualifies for it. In the vast majority of cases, employers will not need to be troubled in the first place.
Let me now deal with the practical implications of Lords amendments Nos. 1 and 3, which, by contrast, would be anything but easy to operate. As I said earlier, they would be an administrative nightmare. The central practical problem is how the Revenue will know which employers qualify for the opt-out. Inland Revenue information about the number of people employed by a particular employer is based on employers' end-of-year returns, so it could be up to a year out of date. A possible source of information could be the employees themselves, but employees filling in their tax credit application forms will, in many cases, not know how many other employees work for the same employer. They may send in the form without the information, make a guess, which may or may not be correct, or ask the employer for the information—thus adding a further element of employer involvement and possible delay in the application. Moreover, in all cases of doubt, the Revenue would have to investigate. The proposals would, therefore, increase compliance burdens on employers, to establish whether they should be able to opt out. The Government think that such a proposition is ridiculous.
Further problems would arise with employers who have about 10 employees, as they might be eligible to elect to opt out in one year, but not be eligible to do so the next. Some employers could move from the exempt to the non-exempt category several times in one year. Do hon. Members really think that employers should be relied on to opt back into the employer payment scheme if they take on additional staff? Again, the proposal would only add another unnecessary complication to the system.
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I think that it will be clear to the House that the type of arrangements needed to make an employer opt-out work cannot possibly be in the best interests of employees entitled to tax credits. The award of tax credits could not be finalised until the Revenue and the employer had agreed who would make the payments. Therefore, needy families would be kept waiting for vital income to which they were entitled—and that would not be acceptable to the Government. Employees of employers who move in and out of the fewer-than-10-employees category would be thoroughly confused and would not know where they were from one award to the next.
I am sure that the Lords amendments were prompted by a concern to protect small businesses from damaging administrative burdens. However, the Opposition are not alone in wanting small businesses to flourish. The Government are committed to creating a climate in which small and medium-sized enterprises are able to thrive, and we are proud of the measures that we have introduced in the past two years to make that happen.
Since March 1997, we have lowered the small companies tax rate twice: the rate is now 20 per cent. Moreover, as the Chancellor announced in his March Budget, from April 2000, there will be a new 10p rate—which is the lowest rate of corporation tax for small

companies among major industrialised countries. The new small business service, which was also announced in the Budget, will provide better and more targeted support and assistance to small businesses. There will also be a new business guide, business tax starter pack and guidance for new employers, and a new helpline service for new employers, offering fast-track support. The Government are committed to assisting small employers and to ensuring that their compliance costs are reduced.
The Budget also raised the threshold for quarterly payment of PAYE tax from £600 to £1,000 per month, thus extending the quarterly scheme to an additional 130,000 employers—who could each save up to £100 annually. Since 1997, we have abolished advance corporation tax, bringing a £1 billion cash-flow advantage to business and benefiting many small businesses. We have also enhanced capital allowances for small companies, which have been in place since July 1997.
As part of the service for all new small businesses, we shall, from April 2000, be providing assistance with their payroll operation. The Department of Trade and Industry is consulting on the method of delivery of that service. We intend that the service should be delivered by means of a voucher scheme, whereby all eligible businesses will be able to redeem a voucher with any commercial provider on a list held by the small business service. The scheme should do much to ease the burdens on small businesses of running their payroll.
Specifically, in the coming months, and after April 2000, all employers will be given guidance to enable them to pay tax credits smoothly and with the least possible extra work. There will be a targeted publicity campaign involving all the media and there will be seminars across the country which will be of particular interest to small businesses.
Small employers have nothing to fear from paying tax credits through the payroll. Many of them will gain from the more satisfied and motivated work force who will result.

Miss Julie Kirkbride: I have listened with interest to the hon. Lady's explanation of why she does not believe that the Government's proposals would be unfair on small businesses, but she knows that the working families tax credit cannot be paid through the tax code because of the distortions that would ensue. It will have to be a separate item, which means that the benefits that she is claiming for small businesses will not be so great. If she is serious about helping small businesses, why not compensate them for the administration of the scheme in line with the existing precedent of the payment of statutory maternity pay? That would be a welcome way forward for small businesses.

Dawn Primarolo: The hon. Lady cannot have been listening to the points that I have just made about the DTI's consultation on the voucher scheme and our services to small business. That point is addressed by the proposals. I do not intend to go back over the debate on tax credits that we have had in this and another House. If the hon. Lady informs herself, she will see that the requirements on business are no more onerous than under the family credit system.

Mr. Geraint Davies: Does my hon. Friend agree that the amendments are not sincere,


but are wrecking amendments? There is no logic to choosing 10 employees as a threshold. Companies will vary between nine, 10 and 11 employees during a year. There is no linkage with turnover. The amendments are an incentive to small companies not to grow larger than 10 employees. The Opposition are using the amendments to hide the fact that they want to scrap the working families tax credit and give away the billions of pounds that they have been promising willy-nilly to smokers and others in debates on the Finance Bill.

Dawn Primarolo: I have made it clear that the amendments are wrecking amendments which would break the tax credits principle. The arrangements that the Government have made across many areas to support small businesses show that we are determined to deal with compliance costs while assisting small businesses to discharge their obligations in the tax system. The hon. Member for Chingford and Woodford Green made it clear when he was Opposition spokesman on social security that the Conservatives opposed the introduction of the working families tax credit. They are trying to use the issue of employers to conceal that opposition, which would be rejected by the electorate. The millions of families who will benefit will be horrified to hear that, for all the Conservatives' words about supporting families, they oppose a policy that will help families in poverty.
I hope that I have convinced the House that the amendments would involve red tape which would not be in the interests of tax credit recipients. The system would be time consuming and costly. Conservative Members claim to be concerned about compliance costs for small business, but the amendments would impose more compliance costs and burdens. The Government are already addressing the needs and concerns of all employers, large and small, through consultation on the detailed schemes that I have set out. The CBI has made clear its welcome for our policy. I urge the House to reject the amendments and support the Government's policy on the introduction of tax credits.

Mr. Pickles: I am most grateful to the hon. Lady. The Opposition will long remember her closing remark—that the CBI agrees with the measure so we must support it. I am not entirely sure what Mr. Monks and Lord Hattersley would have to say about that, but at least we know that, in the great debate within the Labour party, the hon. Lady is on the side of the toffs.

Dawn Primarolo: I hate to spoil the development of the hon. Gentleman's speech as he warms to his theme, but I am sure that he does not need reminding that the TUC also supports our policy, as do a large number of organisations, including the National Council for One Parent Families. Perhaps the hon. Gentleman could broaden his theme somewhat.

Mr. Pickles: At the moment I am trying not to broaden myself.
The hon. Lady is quite right, but she chose to refer to what she thought was most important—the praise of the CBI. I recognise that she is a creature of the current Labour party and wish her every success in the forthcoming reshuffle.

Mr. Tony McNulty: What about the hon. Gentleman?

Mr. Pickles: We have had our reshuffle.
It seems to me that the hon. Lady was attempting to create a paper tiger in order to destroy it. Lords amendment No. 1 is not, by any stretch of the imagination, a wrecking amendment: it is a very narrow amendment that would help the general development of the Bill. The hon. Lady said that it would be disastrous to the Government's policy, as payments through the wage packet were central to the Government's scheme. Payments through the wage packet would remain central to the Government's scheme even if the amendment were accepted. The amendment would not affect that. Essentially, the Government have painted themselves into a corner.

Mr. Derek Twigg: Will the hon. Gentleman answer the question that the Minister has asked him at least twice? If his party got back into government, would they scrap the working families tax credit and therefore take away money from 5.75 million children—yes or no?

Mr. Pickles: I am grateful for the opportunity to answer the hon. Gentleman, who has not participated in our proceedings so far and therefore cannot be blamed for relying too heavily on the briefing from the Government Whips. However, I am afraid that the Whips have let him down. I shall give the hon. Gentleman a full answer, as he deserves one.
My hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said that we would not have introduced such a scheme. Frankly, the credit is very similar to family credit and it does not improve on it. As the right hon. Member for Birkenhead (Mr. Field) said, the working families tax credit will take money away from children. It will effectively transfer money from men to women. It will increase stigma. It will do little to help people at the lower end of the income scale—and it will significantly increase fraud.
My hon. Friend the Member for Chingford and Woodford Green said that we will probably have to follow Canada's example. Canada introduced a similar system a number of years ago and has effectively had to reverse it. If the hon. Member for Halton (Mr. Twigg) thinks that the party that introduced family credit would not provide some in-work benefit, I have to disabuse him. There is no question about that. However, the hon. Gentleman supports a more expensive mechanism for delivering in-work benefit. I am sorry to have shot the hon. Gentleman's fox, if he will forgive me the hunting metaphor, but this is a further example of the Government's creating a paper tiger in order to destroy it.
The Government apparently have two contradictory aims: to reduce the burden on business and to change people's attitude to in-work benefit. However, their chosen method in respect of the latter involves imposing burdens on business. The amendment seeks to square the circle that the Government have created.
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If only the Government—who are desperate to appear tough on this measure after their battering by recent rebellions and their drubbings at the polls—would see reason. However, to give ground here might be portrayed as a U-turn, or as giving way to the middle-class values that the Paymaster General clearly embraces but about which some in her party have doubts. If the Government



gave way today, they might make this dreadful Bill work. The amendment would not only exempt those small firms who so elected but ensure that the overwhelming majority of workers were still paid the working families tax credit through their pay packets.

Mr. Geraint Davies: Is not the real reason why the Tories want to scrap the working families tax credit that they want to take billions of pounds from young children to pay for the promises made by Opposition Members in Committee; for instance, not to increase tax on cigarettes and fuel and not to abolish the married couples allowance for older people? Is not the Conservatives' policy to take money and food from poor children to subsidise cigarette smokers? Is that the basic strategy of the Opposition?

Mr. Pickles: The short answer to that is no.
The Government's own advisers have doubts about the working families tax credit. The Paymaster General was most careful not to answer my question about Lord Haskins. I know that Lord Haskins is on the Euro-enthusiast wing of the Labour party and that the hon. Lady may wish to distance herself from him. However, she will recall that Lord Haskins is the chairman of the better regulation task force, which was set up by the Prime Minister to cut red tape on business. It may be an embarrassment to the Government that the first thing that the noble Lord has picked on has been the Tax Credits Bill.
We know that the noble Lord has received a number of complaints about the Bill. The Financial Times on 29 May reported that the Treasury had seriously underestimated the burden that the working families tax credit would impose on small businesses. If the noble Lord has been seen to be kicking over the traces a little, he is in good company. The Minister of Agriculture, Fisheries and Food and the Secretary of State for Trade and Industry—as reported in The Sunday Telegraph on 25 February—have expressed worries about the effect of the policy on small businesses, and particularly on agriculture.
According to the same article, the Prime Minister is worried about the effect on middle England—again, something that the Paymaster General has embraced: she is clearly in favour of warm beer, and matrons cycling happily through the countryside. Were it not for the European elections, the Government might have accepted our proposals. Perhaps our victory has had the detrimental effect of preventing this sensible measure from proceeding.

Maria Eagle: I have been trying to follow the hon. Gentleman's argument. Why does his party always seem to be against alleviating poverty? The Bill, along with the national minimum wage and certain other reforms, will lift 1.25 million people out of poverty, including 700,000 children. Why does his party oppose those measures?

Mr. Pickles: I cannot take credit for this point, because the hon. Member for Northavon (Mr. Webb) made it both on Second Reading and in Committee, but the working families tax credit does absolutely nothing for those in the

lower income deciles: it only helps people at the other extreme, earning up to £38,000. I am sure that it will come as a great surprise and disappointment to the hon. Lady, but the Government are not giving a penny piece extra to those on lower incomes but are supporting those higher up the income scale. She is clearly mystified and I am sure that she feels badly let down by the Government.

Mr. Geraint Davies: Will the hon. Gentleman give way?

Mr. Pickles: First I must make a little progress, as I do not feel that I have done full justice to Lord Haskins and his views.

Mr. James Cran: We want to hear more.

Mr. Pickles: I am here to please the Whips, and if they want to hear more about Lord Haskins, they will. I know how the system works.
Lord Haskins is understood to have concluded that payroll issues are one of the main regulatory problems facing small businesses. In reporting to the Treasury on competitiveness—I understand that the report is on the Chancellor's desk as we speak and will be published in July—he concluded that, in respect of companies employing fewer than 10 people, the working families tax credit should be processed by the Inland Revenue for at least two years. That is the very point that the Paymaster General has just rejected. Companies need time to prepare and, according to Lord Haskins, owner-managers may require Government help if they are not to be swamped by the regulatory burden.
What is the regulatory burden? The Paymaster General said that it was no different from that arising from family credit, but family credit claimants only have to produce a certificate of work, after which they can rely on the pay slip. The conduit for small businesses is not as simple as the Government seek to suggest. The overworked, over-stressed small businesses have to complete a series of steps.
First, the employer must calculate the amount of WFTC or disabled persons tax credit to be paid by multiplying the specified daily rate—to be supplied by the Inland Revenue—by the number of days in the payment period. Then the employee's net pay after the deduction of PAYE and national insurance must be added. Then the employer must enter the figure on the employee's pay slip and record it as an item entitled "tax credit".
Then the total must be calculated and a separate tax credit figure recorded on another form. Total tax credits must be recorded on Inland Revenue forms P14 and P60. At the end of the year, a further form, the P35, is needed for each employee, including the total amount of any Inland Revenue funding for the year. Employers must also produce certificates of payment for leavers. That strikes me as reasonably onerous.
In Committee, the Financial Secretary, whom we all respect for her fairness and honesty, characteristically admitted that there would be some extra costs. In characteristic fashion, she said:
I do not deny that employers will face some extra work in connection with paying tax credits through the pay packet, and of course that will involve some costs".—[Official Report, Standing Committee D, 9 February 1999; c. 136.]

Dawn Primarolo: Will the hon. Gentleman accept that on application the requirements are no more onerous for


the employer? Does he accept what I have said this afternoon about all the measures that the Government have taken to reduce compliance costs for small businesses? I explicitly recognised the increased requirements in the operation of the working families tax credit and pointed out that the consultation that the DTI is now undertaking, in particular on the voucher scheme, would also address the issue. The hon. Gentleman's argument that we have not recognised and are not dealing with the increase in costs is simply not accurate.

Mr. Pickles: The hon. Lady has recognised the problem but she is not doing anything about it. It does not help that the regulatory assessment is so woefully inadequate. The hon. Lady will recall that, on Report, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) referred to the work of Mr. Roger Cockfield, Reader in taxation at De Montfort university, in which he demonstrated that the yearly impact on employers with fewer than five employees was not £35, as the Government suggest, but £342. The hon. Lady, who will have read the report of proceedings in the other place, will have seen that that issue was further explored by their lordships, who arrived at a similar figure. Neither the hon. Lady nor her hon. Friends have been able to knock down Mr. Cockfield's figures.
The burden will fall disproportionately on small businesses. It will affect their cash flow. The Social Security Committee recommended that, to ease the problem, advance payments should be made to employers with cash flow problems and that reimbursements of administrative costs should be paid to smaller firms. The Government have rejected both suggestions.

Dawn Primarolo: With regard to the question of reimbursement of employers, I made it clear that, if employers could not meet the costs of paying the tax credit because they could not deduct it from PAYE or NICs that they had collected on our behalf, they could apply for a grant from the Inland Revenue to cover those costs. That point has been specifically dealt with, and now that I have jogged the hon. Gentleman's memory, I am sure that he will acknowledge that.

Mr. Pickles: Of course I acknowledge the point. I would not wish to accuse the hon. Lady of feeling smug, but before she starts feeling too happy with herself she should bear in mind the views of the National Farmers Union, which said:
We are also fearful that in a significant number of cases involving agricultural workers, tax credits are likely to exceed liabilities for PAYE and National Insurance Contributions which could cause cash flow problems for employers.
The Minister in the other place put that point more simply when he said:
There will be a reduction in the positive cash flow benefits of the employer's relationship with the Inland Revenue."—[Official Report, House of Lords, 26 April 1999; Vol. 600, c. 126.]
The Government expect small firms not only to be their agent for paying benefits but to pay for the privilege. It is therefore surprising that the only help that the Minister in the other place offered was a potential reduction in software costs which might help to ease the burden on small employers. The Government want to change employees' attitude to in-work payments, but not the attitude of employers.
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At present, there are 1.17 million employers, of whom 825,000 are covered by the amendment. There are potentially 730,000 claimants of working families tax credit, of whom—according to the Minister's figures—100,000 are covered by the amendment. The amendment would thus affect 70 per cent. of firms, but 87 per cent. of those entitled to receive working families tax credit would continue to do so through their wage packet.
The amendment would preserve the principle of payment through the pay packet, and ensure that small firms did not have to go through an elaborate opt-out mechanism, as they could elect to opt out. I do not believe that payment directly from the Inland Revenue would in any way exclude the change of culture that the Government seek to achieve.
Today's CBI press release has been much quoted. It is only fair for me to refer to the only sentence that neither I nor the Minister have yet read out. It states that
direct payment by the Revenue would reinforce the new status of the tax credit. Direct payment by the Revenue would not involve a significant additional burden on the Revenue as it will already be making direct payments to some employees.
The Government can retain the principle behind the Bill while still exempting small businesses. We are in a strange position, in that the Opposition want to strengthen the Bill, while the Government seek to weaken it. This is a modest amendment, and deserves consideration.

Mr. Webb: It is a pleasure to follow the hon. Member for Brentwood and Ongar (Mr. Pickles), as I have done on a number of occasions. Our styles are rather different, but we are of one mind about the amendments, which were tabled by my noble Friend Lord Goodhart in another place and which received the support of Conservative peers.
I listened with interest to the Minister. I started with a blank sheet of paper as I tried to list the possible arguments against the amendments. I made notes about the defences that she presented, and shall take this opportunity to reflect on them.
The Minister argued that payment through the pay packet would reduce stigma, and that allowing small employers to opt out and their employees to receive payment from the Inland Revenue would somehow be a stigmatising experience. My noble Friend Earl Russell in another place said:
From time to time, I have the pleasure of receiving refunds from the Inland Revenue. They have been known to come direct to me and not through my pay packet. When those refunds reach me, I do not suppose that they are social security benefits."—[Official Report, House of Lords, 4 May 1999; Vol. 600, c. 586.]
In other words, people can distinguish between benefit payments and tax refunds. The difference is clear, regardless of whether such payments come through the pay packet or the post. The Government are patronising the prospective recipients of the tax credits. They assume that people cannot tell the difference between a social security payment and a tax credit, and that they cannot add up two numbers—the amount in the pay packet and the tax credit amount—if the tax credit is paid direct to their bank accounts. I do not feel able to support such patronising arguments.
The Minister said that we cannot have a system in which small firms opt out of their tax administration responsibilities, as though that were some grand,


sweeping point of principle, then listed the exceptions. She said that the very smallest firms with no PAYE employees will not be so burdened. However, she noted that a line has to be drawn somewhere, which suggests that it is a matter of pragmatism rather than principle.
The Minister explained that the smallest firms would be exempted from the requirement because, on the balance of benefits, it was more beneficial to allow them to opt out. The reason that she gave was that the burden would be so great that it would outweigh the benefit gained by getting the money to the employee through the pay packet. On the balance of arguments about costs and benefits, it was accepted that certain categories of firm should be exempted. The amendments merely seek to exempt a broader category.
In contrast to similar amendments that we have considered, the present amendments do not exempt all small firms—merely those that opt for exemption because they would find compliance particularly burdensome. Those with sophisticated payroll systems or who are at home with personal computers are not forced to opt out. The Minister mentioned 100,000 employees—one in seven of those covered by the tax credit—but that figure is a maximum. Many small firms that do not find the change a burden might not opt out, making the number of employees withdrawn even smaller. It is almost impossible to argue that amendment No. 1 is a wrecking amendment as it would remove from the scheme only a fraction of those covered by it.
The Minister said that the amendments would cause an administrative problem because information on the size of firms might be a year out of date. That is no great problem. Most small firms clearly and consistently fall within the threshold employing fewer than 10 people. Off the top of my head, I believe that more than 90 per cent. of small firms are always small, perhaps with one or two employees, and it is irrelevant that information on them is a year old.
Of course, some firms will move above and below the threshold, and that would create problems. The Minister said that the smallest firms—those without pay-as-you-earn liability—would be exempted, but the same problems would apply if such a firm went over the line one year and back under it the next. The Minister seems to believe that the problem can be satisfactorily resolved for those firms, so why is the same not true of firms with fewer than 10 employees? Discrimination and workplace legislation applies only to firms with specified numbers of employees; if that legislation can be implemented, why cannot the amendments?
The Minister said that recipients would face uncertainty about whether the employer would deliver the tax credit. There might be delays in payment. But the tax credit is paid directly to the employee, and the money will reach the employee while the question of who pays is being resolved. There will be no delay. Even under the Government's proposals, the money will be paid direct at the beginning of a claim and employers will not be involved at that stage.
The problems that the Minister raised are fig leaves intended to cover the fact that the Government are taking an ideological position. Many of their arguments about practicality simply do not stand up. The Minister

reassured us that employers would be able to attend seminars. Is she saying that hard-pressed business people, possibly sole traders with one employee, will be able to spend an afternoon at the local Inland Revenue office learning how to administer the system. The Minister cannot say that that is no burden on business. Small businesses should not have that obligation imposed on them.
The hon. Member for Brentwood and Ongar referred to the Minister's throwaway suggestion that the Bill's proposals are no more onerous than family credit. She may wish to set the record straight if that was not what she meant. It is certainly what we heard her say.

Dawn Primarolo: I am grateful to the hon. Gentleman for his seeking to assist me, but if he reads the record, he will find that I said specifically that the proposals would be no more onerous at the point at which an application is made. I referred clearly to compliance requirements on business, and I set out all the Government's points. The hon. Gentleman suggests—as did the hon. Member for Brentwood and Ongar (Mr. Pickles)—that we do not recognise the burdens. Let me remind of him of one item in the Budget. We moved quarterly PAYE payments from 600 to 1,000—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The Minister is making an intervention, which should be brief.

Mr. Webb: Thank you, Mr. Deputy Speaker. I am happy to accept the Minister's clarification. If she was merely making the point that earnings information must be verified in both cases, I am happy to accept that that is so. However, the regulatory impact assessment makes it clear that business will face costs of an aggregate £100 million or more, recurring every year. The Minister has failed to convince me that will not be onerous for small firms.

Mr. David Willetts: Will the hon. Gentleman confirm that what the Minister has just said appears to admit that the method of paying the new working families tax credit is more onerous than the old method of family credit? Her defence was that she was referring only to the method of calculating entitlement to the benefit.

Mr. Webb: The hon. Gentleman is right that the regulatory impact assessment shows that the additional cost of more than £100 million relates to the cost of delivering the benefit, which does not feature in family credit.
There has been some discussion of what the burden of the tax credit on a small firm will be. Figures of £37 and £342 have been cited, but I suspect that the Minister would accept the figures advanced by Baroness Hollis in another place. In response to my noble Friend Lord Goodhart, she gave a figure for small firms and said:
Where a small employer has a WFTC member of staff … it will typically cost £135 per year for an employer with up to five staff'.—[Official Report, House of Lords, 4 May 1999; Vol. 600, c. 560.]
Those are Government figures. The hon. Member for Brentwood and Ongar gave some larger figures, which may or may not be correct, but even the Government admit to £135 every year for a small firm. The Minister


calls it the worst case scenario: £135 a year for a small business with one WFTC employee, using a manual payroll system, as must be the case with most such small firms. While £135 may not be much to the Minister, it is to small firms struggling to get by.
There is an inconsistency in the Government's approach. They argue that the burden on business and small business is so negligible that we should not allow small firms to opt out. However, schedule 3 provides protection for jobseekers turned down by employers who do not want to take on potential recipients of the WFTC. The Bill anticipates that employers may want to discriminate against such people. Why could that possibly be? It is because of the burden of administering their payroll.
The Lords amendments would reduce bureaucracy because one of the key bureaucratic elements of the scheme is that the Inland Revenue will have to pay small firms up-front so that they can pay the tax credit. The Minister would accept that it is small firms that will need to avail themselves of the facility. If the smallest firms could opt out, that central category of firms would no longer need to claim the money up-front, so a whole bureaucracy of advance payment to allow firms to pass the money on to their employees and reconcile the figures at the end would be done away with. All the difficult firms would be taken out of the system.
These are far from being wrecking amendments. They are helpful and constructive. They would leave 87 per cent. of employees in the existing regime but take the problem cases out of it. The CBI, in the full, unexpurgated version of its press release, expresses its concern. The Federation of Small Businesses, which includes a greater number of small firms, opposes the Government's proposals.
I disagree with the Conservatives in that I am clear that the principle of the tax credit and the extra resources are welcome, but the Liberal Democrats are concerned about the way in which they are being delivered. We are united in believing that small firms should not have to meet the cost of this piece of Government ideology.

Mr. Michael Fallon: The Paymaster General has the House against her on this one, and I am not here to help her. The amendments are modest and, as the hon. Member for Northavon (Mr. Webb) rightly said, apply only to the very smallest businesses, and even they can opt out if they wish. I cannot see more than several thousand businesses taking advantage of that, but they are precisely the ones that the Government should be helping rather than imposing an extra burden on them.
We are dealing with the tiniest businesses in our economy but we are heaping more and more roles upon them and turning them into Government agencies. They are expected to be tax collectors, one-man benefit offices and the fraud squad. The Paymaster General told us of a new role: they are expected to be social engineers and to help the Government reduce stigma. I think she said that they would help advertise and promote the scheme. They are supposed to be part of the Government's public relations machine. That is not the function of a small business in our economy.
4.45 pm
Let me deal briefly with the main arguments that the Paymaster General made in opposing the amendments. First, she said that they would encourage businesses generally to opt out of their responsibilities. That completely misses the point. The amendments would allow the very smallest businesses to opt out of the extra responsibilities that have been placed on them. No one suggests that this is a kind of a thin end of the wedge for a wider attack on PAYE.
Secondly, the Paymaster General suggested that such an exemption would result in an administrative nightmare. She still does not understand that the administrative nightmare is this tax credit itself. It is coming and she ought to look at ways of minimising, not maximising, its impact. Thirdly, she suggested—the hon. Member for Northavon got there before me in pointing this out—that there would be lots of guidance and seminars. No small business man with three or four employees has time to travel across the country to some regional seminar. The Paymaster General ought to understand, from the experience of the working time directive and other regulations that have been introduced in the past two years, that the guidance itself is as much a burden as the original regulations. Will she undertake to make that guidance as simple and effective as possible when she replies to this or later debates?
Fourthly, the Paymaster General suggested that somehow the CBI, the TUC and the National Council for One Parent Families were all in favour of the proposal and would no doubt oppose the amendments. Those organisations do not represent small business. The CBI certainly does not. There cannot be an employer with fewer than 10 employees in the country who can afford to belong to the CBI dinner—[Laughter] I mean the CBI organisation; I was going to say that they cannot afford to attend the CBI dinner. The organisations mentioned are not small business organisations, and for the Paymaster General to pray them in aid does her cause a great disservice.
The Bill is discriminatory. It discriminates against the very businesses that we ought to be helping. I declare an interest as a director of a small business. Such businesses do not have big personnel or human resources departments to sort out all this stuff. The entrepreneur himself or herself will have to take time off to wade through the paperwork.
The Bill discriminates, as the hon. Member for Northavon correctly said, against employees. My fear is that, faced with the choice of employing someone who would qualify for the tax credit and someone who would not, and who therefore would not come with that extra burden of paperwork, small businesses will discriminate against those who come to them and are in receipt of the working families tax credit. That is recognised by the Government themselves elsewhere in the Bill.
In this House, we debate enterprise; we praise small businesses. Then, at the first opportunity, we chuck out an amendment that is designed to help them. The Government talk deregulation, yet here again, faced with a real example of how we might deregulate just for the very smallest of small businesses, they impose more regulation on them. I hope that even at this late hour the Paymaster General will think again.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 306, Noes 160.

Division No. 213]
[4.48 pm


AYES


Adams, Mrs Irene (Paisley N)
Dalyell, Tam


Ainger, Nick
Darling, Rt Hon Alistair


Ainsworth, Robert (Cov'try NE)
Darvill, Keith


Alexander, Douglas
Davey, Valerie (Bristol W)


Allen, Graham
Davidson, Ian


Anderson, Donald (Swansea E)
Davies, Rt Hon Denzil (Llanelli)


Armstrong, Rt Hon Ms Hilary
Davies, Geraint (Croydon C)


Ashton, Joe
Dawson, Hilton


Atkins, Charlotte
Dean, Mrs Janet


Austin, John
Denham, John


Barnes, Harry
Dismore, Andrew


Barron, Kevin
Dobbin, Jim


Bayley, Hugh
Donohoe, Brian H


Beard, Nigel
Doran, Frank


Begg, Miss Anne
Dowd, Jim


Bell, Stuart (Middlesbrough)
Drew, David


Benn, Hilary (Leeds C)
Drown, Ms Julia


Benn, Rt Hon Tony (Chesterfield)
Dunwoody, Mrs Gwyneth


Benton, Joe
Eagle, Angela (Wallasey)


Best, Harold
Eagle, Maria (L'pool Garston)


Betts, Clive
Edwards, Huw


Blackman, Liz
Efford, Clive


Blears, Ms Hazel
Ennis, Jeff


Blunkett, Rt Hon David
Fisher, Mark


Boateng, Paul
Fitzsimons, Lorna


Borrow, David
Flint, Caroline


Bradley, Keith (Withington)
Follett, Barbara


Bradley, Peter (The Wrekin)
Foster, Michael Jabez (Hastings)


Brinton, Mrs Helen
Foster, Michael J (Worcester)


Brown, Russell (Dumfries)
Foulkes, George


Browne, Desmond
Galloway, George


Buck, Ms Karen
Gapes, Mike


Burden, Richard
Gardiner, Barry


Burgon, Colin
George, Bruce (Walsall S)


Caborn, Rt Hon Richard
Gerrard, Neil


Campbell, Alan (Tynemouth)
Gibson, Dr Ian


Campbell, Mrs Anne (C'bridge)
Gilroy, Mrs Linda


Campbell, Ronnie (Blyth V)
Godman, Dr Norman A


Campbell-Savours, Dale
Godsiff, Roger


Cann, Jamie
Goggins, Paul


Casale, Roger
Golding, Mrs Llin


Cawsey, Ian
Gordon, Mrs Eileen


Chapman, Ben (Wirral S)
Griffiths, Jane (Reading E)


Chaytor, David
Griffiths, Win (Bridgend)


Clapham, Michael
Grogan, John


Clark, Rt Hon Dr David (S Shields)
Gunnell, John


Clark, Dr Lynda (Edinburgh Pentlands)
Hall, Mike (Weaver Vale)



Hall, Patrick (Bedford)


Clark, Paul (Gillingham)
Hamilton, Fabian (Leeds NE)


Clarke, Charles (Norwich S)
Hanson, David


Clarke, Rt Hon Tom (Coatbridge)
Healey, John


Clarke, Tony (Northampton S)
Henderson, Ivan (Harwich)


Clwyd, Ann
Hepburn, Stephen


Coaker, Vernon
Hesford, Stephen



Coffey, Ms Ann
Hewitt, Ms Patricia


Cohen, Harry
Hill, Keith


Coleman, Iain
Hinchliffe, David


Connarty, Michael
Hodge, Ms Margaret


Cook, Frank (Stockton N)
Home Robertson, John


Corbett, Robin
Hood, Jimmy


Corbyn, Jeremy
Hoon, Geoffrey


Corston, Ms Jean
Hope, Phil


Cousins, Jim
Hopkins, Kelvin


Cranston, Ross
Howarth, George (Knowsley N)


Crausby, David
Howells, Dr Kim


Cryer, John (Hornchurch)
Hoyle, Lindsay


Cummings, John
Hughes, Ms Beverley (Stretford)


Cunningham, Jim (Cov'try S)
Humble, Mrs Joan





Hurst, Alan
Norris, Dan


Hutton, John
O'Brien, Bill (Normanton)


Iddon, Dr Brian
O'Brien, Mike (N Warks)


Illsley, Eric
Olner, Bill


Jackson, Ms Glenda (Hampstead)
Organ, Mrs Diana


Jackson, Helen (Hillsborough)
Osborne, Ms Sandra


Jenkins, Brian
Palmer, Dr Nick


Johnson, Miss Melanie (Welwyn Hatfield)
Pearson, Ian



Pendry, Tom


Jones, Barry (Alyn & Deeside)
Pickthall, Colin


Jones, Mrs Fiona (Newark)
Plaskitt, James


Jones, Helen (Warrington N)
Pollard, Kerry


Jones, Jon Owen (Cardiff C)
Pond, Chris


Jones, Dr Lynne (Selly Oak)
Pound, Stephen


Jones, Martyn (Clwyd S)
Powell, Sir Raymond


Keeble, Ms Sally
Prentice, Ms Bridget (Lewisham E)


Keen, Alan (Feltham & Heston)
Prentice, Gordon (Pendle)


Keen, Ann (Brentford & Isleworth)
Primarolo, Dawn


Kelly, Ms Ruth
Purchase, Ken


Kemp, Fraser
Quin, Rt Hon Ms Joyce


Kennedy, Jane (Wavertree)
Quinn, Lawrie


Khabra, Piara S
Radice, Giles


Kidney, David
Rammell, Bill


Kilfoyle, Peter
Raynsford, Nick


King, Andy (Rugby & Kenilworth)
Reed, Andrew (Loughborough)


Kumar, Dr Ashok
Reid, Rt Hon Dr John (Hamilton N)


Ladyman, Dr Stephen
Robinson, Geoffrey (Cov'try NW)


Lawrence, Ms Jackie
Roche, Mrs Barbara


Lepper, David
Rooker, Jeff


Leslie, Christopher
Rooney, Terry


Levitt, Tom
Ross, Ernie (Dundee W)


Lewis, Ivan (Bury S)
Rowlands, Ted


Lewis, Terry (Worsley)
Roy, Frank


Liddell, Rt Hon Mrs Helen
Ruane, Chris


Linton, Martin
Ruddock, Joan


Livingstone, Ken
Russell, Ms Christine (Chester)


Lloyd, Tony (Manchester C)
Ryan, Ms Joan


Lock, David
Salter, Martin


Love, Andrew
Sarwar, Mohammad


McAvoy, Thomas
Savidge, Malcolm


McCabe, Steve
Sawford, Phil


McDonagh, Siobhain
Sedgemore, Brian


Macdonald, Calum
Sheldon, Rt Hon Robert


McDonnell, John
Short, Rt Hon Clare


McGuire, Mrs Anne
Simpson, Alan (Nottingham S)


McIsaac, Shona
Singh, Marsha


McKenna, Mrs Rosemary
Skinner, Dennis


McNulty, Tony
Smith, Angela (Basildon)


Mactaggart, Fiona
Smith, Rt Hon Chris (Islington S)


McWalter, Tony
Smith, Jacqui (Redditch)


McWilliam, John
Smith, John (Glamorgan)


Mahon, Mrs Alice
Smith, Llew (Blaenau Gwent)


Mallaber, Judy
Snape, Peter


Mandelson, Rt Hon Peter
Soley, Clive


Marsden, Paul (Shrewsbury)
Spellar, John


Marshall, David (Shettleston)
Squire, Ms Rachel


Marshall, Jim (Leicester S)
Starkey, Dr Phyllis


Marshall-Andrews, Robert
Stewart, David (Inverness E)


Martlew, Eric
Stewart, Ian (Eccles)


Maxton, John
Stinchcombe, Paul


Meacher, Rt Hon Michael
Stoate, Dr Howard


Meale, Alan
Strang, Rt Hon Dr Gavin


Merron, Gillian
Stringer, Graham


Michie, Bill (Shef'ld Heeley)
Stuart, Ms Gisela


Miller, Andrew
Taylor, Rt Hon Mrs Ann (Dewsbury)


Mitchell, Austin



Moonie, Dr Lewis
Taylor, Ms Dari (Stockton S)


Moran, Ms Margaret
Thomas, Gareth (Clwyd W)


Morgan, Ms Julie (Cardiff N)
Thomas, Gareth R (Harrow W)


Morley, Elliot
Timms, Stephen


Mountford, Kali
Tipping, Paddy


Mudie, George
Todd, Mark


Mullin, Chris
Touhig, Don


Murphy, Denis (Wansbeck)
Trickett, Jon


Murphy, Jim (Eastwood)
Turner, Dennis (Wolverh'ton SE)


Naysmith, Dr Doug
Turner, Dr Desmond (Kemptown)






Twigg, Derek (Halton)
Winnick, David


Twigg, Stephen (Enfield)
Winterton, Ms Rosie (Doncaster C)


Vaz, Keith
Wise, Audrey


Walley, Ms Joan
Wood, Mike


Ward, Ms Claire
Woolas, Phil


Wareing, Robert N
Worthington, Tony


Watts, David
Wright, Anthony D (Gt Yarmouth)


White, Brian
Wright, Dr Tony (Cannock)


Wicks, Malcolm
Wyatt, Derek


Williams, Rt Hon Alan (Swansea W)



Williams, Alan W (E Carmarthen)
Tellers for the Ayes:


Wills, Michael
Mr. David Clelland and



Mr. Greg Pope.




NOES


Ainsworth, Peter (E Surrey)
Green, Damian


Amess, David
Greenway, John


Ancram, Rt Hon Michael
Grieve, Dominic


Arbuthnot, Rt Hon James
Hague, Rt Hon William


Atkinson, Peter (Hexham)
Hamilton, Rt Hon Sir Archie


Baldry, Tony
Harvey, Nick


Beggs, Roy
Hawkins, Nick


Bercow, John
Hayes, John


Beresford, Sir Paul
Heald, Oliver


Blunt, Crispin
Heath, David (Somerton & Frome)


Body, Sir Richard
Heathcoat-Amory, Rt Hon David


Boswell, Tim
Hogg, Rt Hon Douglas


Bottomley, Peter (Worthing W)
Howarth, Gerald (Aldershot)


Bottomley, Rt Hon Mrs Virginia
Hunter, Andrew


Brady, Graham
Jack, Rt Hon Michael


Brake, Tom
Jenkin, Bernard


Brazier, Julian
Johnson Smith, Rt Hon Sir Geoffrey


Breed, Colin



Brooke, Rt Hon Peter
Jones, Nigel (Cheltenham)


Browning, Mrs Angela
Key, Robert


Bruce, Ian (S Dorset)
King, Rt Hon Tom (Bridgwater)


Burnett, John
Kirkbride, Miss Julie


Burns, Simon
Kirkwood, Archy


Burstow, Paul
Lait, Mrs Jacqui


Butterfill, John
Lansley, Andrew


Campbell, Rt Hon Menzies (NE Fife)
Leigh, Edward



Letwin, Oliver


Cash, William
Lewis, Dr Julian (New Forest E)


Chope, Christopher
Lidington, David


Clappison, James
Livsey, Richard


Clark, Dr Michael (Rayleigh)
Lloyd, Rt Hon Sir Peter (Fareham)


Clifton-Brown, Geoffrey
Loughton, Tim


Collins, Tim
Luff, Peter


Cormack, Sir Patrick
MacKay, Rt Hon Andrew


Cotter, Brian
McLoughlin, Patrick


Cran, James
Madel, Sir David


Curry, Rt Hon David
Major, Rt Hon John


Dafis, Cynog
Malins, Humfrey


Davey, Edward (Kingston)
Maples, John


Davies, Quentin (Grantham)
Mates, Michael


Davis, Rt Hon David (Haltemprice)
Maude, Rt Hon Francis


Duncan, Alan
Mawhinney, Rt Hon Sir Brian


Duncan Smith, Iain
May, Mrs Theresa


Evans, Nigel
Michie, Mrs Ray (Argyll & Bute)


Faber, David
Moore, Michael



Fabricant, Michael
Moss, Malcolm


Fallon, Michael
Norman, Archie


Fearn, Ronnie
Öpik, Lembit


Flight, Howard
Ottaway, Richard


Forth, Rt Hon Eric
Page, Richard


Fowler, Rt Hon Sir Norman
Paice, James


Fox, Dr Liam
Paterson, Owen


Fraser, Christopher
Pickles, Eric


Gale, Roger
Prior, David


Garnier, Edward
Robathan, Andrew


George, Andrew (St Ives)
Robertson, Laurence (Tewk'b'ry)


Gibb, Nick
Roe, Mrs Marion (Broxbourne)


Gill, Christopher
Ross, William (E Lond'y)


Gillan, Mrs Cheryl
Ruffley, David


Gorman, Mrs Teresa
Russell, Bob (Colchester)


Gray, James
St Aubyn, Nick





Sanders, Adrian
Tredinnick, David


Sayeed, Jonathan
Trend, Michael


Shephard, Rt Hon Mrs Gillian
Tyler, Paul


Shepherd, Richard
Viggers, Peter


Simpson, Keith (Mid-Norfolk)
Walter, Robert


Smith, Sir Robert (W Ab'd'ns)
Waterson, Nigel


Smyth, Rev Martin (Belfast S)
Webb, Steve


Soames, Nicholas
Wells, Bowen


Spicer, Sir Michael
Whitney, Sir Raymond


Spring, Richard
Whittingdale, John


Stanley, Rt Hon Sir John
Widdecombe, Rt Hon Miss Ann


Steen, Anthony
Wilkinson, John


Streeter, Gary
Willetts, David


Swayne, Desmond
Willis, Phil


Syms, Robert
Winterton, Mrs Ann (Congleton)


Tapsell, Sir Peter
Winterton, Nicholas (Macclesfield)


Taylor, Ian (Esher & Walton)
Woodward, Shaun


Taylor, John M (Solihull)
Young, Rt Hon Sir George


Taylor, Matthew (Truro)



Taylor, Sir Teddy
Tellers for the Noes:


Thompson, William
Mrs. Eleanor Laing and


Tonge, Dr Jenny
Mr. Stephen Day.

Question accordingly agreed to.

Lords amendment disagreed to.

Lords amendment: No. 2, in page 3, line 35, at end insert—
("() The Board shall ensure that any single parent can decide to receive payment of any tax credit from the Board rather than from the employer.")

Dawn Primarolo: I beg to move, That this House disagrees with the Lords in the said amendment.
The amendment would give one group of applicants—lone parents—a choice not available to other applicants. It would allow them to choose whether to be paid a tax credit by their employer through the pay packet, or to receive it direct from the Revenue.
I make it plain at the start that, whatever the reason for the amendment, accepting it would mean a major policy change. It is not a matter of tinkering at the margins. The Government have said repeatedly that paying tax credits through the wage packet is one of the key elements of our policy on tax credits. It is designed to drive home the message that work pays, and to reinforce the crucial link between tax credits and work.
Single parents are not just a small peripheral part of the 1.4 million households expected to get the working families tax credit. They make up half of the family credit case load now, and we expect that to be roughly the same for the working families tax credit. Lone parents are precisely the families who should be able to benefit from the help that the working families tax credit can give, so that they can go back to work if they want to do so.
Our policy is to provide families with extra help and to do it through the wage packet if they are employed. Tax credits send the clearest message to those families that what they get is not a handout but an extra reward for work. That has been discussed at length in both Houses during consideration of the Bill. It allows families who would otherwise be better off on benefit the opportunity to re-enter the labour market and properly see the rewards of working. Against that background, I am not at all sure why single parents should be singled out for this special extra choice of payment method.
One argument is that, in practice, couples have a choice because they can choose which of them receives the tax credit: but the choice is not how it is paid, but who should


receive it. That choice exists in order to avoid involuntary transfer from the woman's purse to the man's wallet, and it has been widely welcomed by those who had concerns about that in the early stages of the design of the working families tax credit. If both parents work, the choice is not whether the parents receive it through the wage packet, but which parent receives it. If there is only one parent, there is only one person to whom the tax credit can be paid.
Therefore, the argument does not run. Lone parents are not being denied something that couples have been given. I hope that it is now crystal clear that couples have a choice about which one of them is to receive the credit because there are two in the family, and that, by definition, cannot apply to a lone parent.
Other arguments in support of the amendment are that it would protect lone parents from having to disclose their circumstances in some way to an employer, or that it would allow them to compete on an equal footing with other parents when looking for work.
Any fears about breaching confidentiality are unfounded. Single parents may need to ask an employer to certify likely wages, as happens now with family credit, once they have a job. That operates in the same way for couples. Single parents are treated no differently from anyone else. The form simply gathers information; it contains no clues about the employee's circumstances. Employers will just be told the amount to pay and will in no way be involved in computing the amount, as was recognised in the previous debate, when going through the steps they will be required to take in order to pay the tax credit.

Mr. Webb: rose—

Dawn Primarolo: In the previous debate, the hon. Gentleman repeatedly intervened, anticipating my speech. If he will allow me, I shall make my speech and, if necessary, I shall be more than happy to return to particular points.
There were concerns that an employee's circumstances could be inferred from the amount notified to the employer. I can assure hon. Members that, because of the number of separate elements, such as the effect of the taper and the child care tax credit, it will be almost impossible to relate the amount of tax credit directly to the elements upon which the award is based, and say that, because someone is receiving X in tax credits, they must have Y children or two other jobs. No doubt payment through the wage packet will mean that employers are aware of employees' eligibility for one of the two tax credits—the working families tax credit or the disabled persons tax credit, which is also part of this—but that is all.
Another concern expressed in this House and in the other place was that employers would be able to discriminate against groups of employees who might cause them administrative hassle by claiming tax credits. The Opposition spokesman was a little confused in the previous debate, on the one hand arguing that discrimination would occur, and on the other saying that the anti-discrimination clauses should not be in the Bill.
It is useful to remember—

Mr. Webb: rose—

Dawn Primarolo: I was not referring to the hon. Gentleman, but I am happy to give way on that point if he insists.

Mr. Deputy Speaker: Order. We will of course remember that we must not go over the arguments about the previous amendment, which has been disposed of.

Dawn Primarolo: The hon. Gentleman has decided not to intervene, but I look forward to hearing his comments.
It is useful to remember that employers are unlikely to know about a person when they take him on and will be unable to make an accurate judgment of whether he is likely to qualify for a tax credit. However, once the credit has been claimed and awarded, and if the employer administers the payment through the wage packet, it will of course become clear that the employee is receiving that credit. We included the relevant provisions in clause 7 because of the possibility of discrimination at that point, but I stress that we are absolutely confident that the overwhelming majority of employers are law abiding, that they will not discriminate in such a way against their employees and that they will recognise the benefits of the tax credit to their work force.
Giving single parents alone a choice of payment method would give employers who wanted to avoid their responsibilities under the tax credits legislation a new incentive to find out about lone parents so that they could persuade or pressure them into asking to receive the tax credit directly, perhaps on renewal. That option would identify lone parents.
If hon. Members are concerned that lone parents should not be identified, and certainly should not be identified as recipients of the tax credit payment, they should not support the amendment. There is no serious mileage in the argument that lone parents are somehow being discriminated against or being denied a right that is provided for other parents. Although the amendment may be an attempt to help lone parents, I do not think that it will do anything of the sort. I ask the House to reject the amendment.

Mr. Willetts: I apologise to the House for turning up rather late for proceedings on the Bill, which is about as far through its parliamentary process as one could imagine. I thank and congratulate my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles), who so powerfully led for us in Committee. I also thank several of my hon. Friends who are in the Chamber and who served on the Committee, making telling criticisms of this profoundly misguided measure.
Perhaps I may reflect for a moment on the history that has brought us to this point. A keen young policy wonk thought that the way forward was to copy the American earned income tax credit. He got the ear of Ministers and the legislation was introduced. It passed through its stages in the House of Commons, but then it hit opposition in the House of Lords on two points: burdens on business, and whether the payment should be made through the benefits system—or directly to the claimant—or through the pay packet.
That is the point at which the history of the efforts made by a previous Government in 1986, to whom I was proud to be an adviser, and the recent history of this Bill, took rather divergent paths. The Government of Margaret Thatcher—who had had objections put to them in the House of Lords on behalf of businesses worried about the burdens on them, and on the so-called wallet-purse argument and whether groups such as single parents should be paid direct—concluded that the right thing to do was to listen to those objections.
5.15 pm
All we are asking the Government to do—having gone through exactly the same process at exactly the same stage—is listen to the same arguments in the same way as the last Government did. What we hear, however, is what has rightly been described as pure ideology: the empty assertion that it is somehow better for working families tax credit to be paid through the pay packet, with absolutely no evidence to back it up.
In fact, it is worse than that. Not only have the Government no evidence to back up their assertion; every criticism that they made in opposition of what was then family credit applies in spades to the scheme that they are now introducing. In opposition, those who are now Ministers used to talk about something called benefit abuse. They claimed that employers were exploiting family credit, and using their knowledge of which people would receive it to hold down wages. I wonder whether the Paymaster General has compared notes with her colleagues in the Department of Trade and Industry, who still use that argument in defence of the minimum wage. They say that one of the reasons why the minimum wage is needed is the need to deal with the behaviour that they claim to have identified on the part of employers.
Now the Government are suddenly introducing a measure that is much more open to that line of criticism than family credit was. There is much more employer involvement in their proposal than there was in family credit. The boot is now firmly on the other foot. Suddenly Ministers are telling us not to worry, and saying that there is no reason for any concern about employers' knowing what is going on.
Leading for the Opposition when the Bill that we introduced years ago was in Committee, the current Leader of the House said:
unfortunately, there are instances in which employers deliberately manipulate the system and withhold the benefits to which their employees are entitled. All Committee members would regret and oppose that, but we must recognise that it happens. For the Government to propose putting the whole weight of payments that are an important part of a family income on to a system which gives employers that freedom is a substantial risk to take."—[Official Report, Standing Committee B, 18 March 1986; c. 943.]
We know that the charge made against family credit was entirely invalid. We know that because an independent body, the Institute for Employment Studies, conducted objective research into what employers knew about people who were receiving family credit. Research

study No. 32 from the Department of Social Security states:
Employers did not have adequate knowledge of Family Credit or sufficient information about potential recruits to adopt such practices"—
that is, exploiting the benefit to hold down wages. The research established that
only 9 per cent. of employers agreed that the availability of Family Credit affected the wages they pay.
The risk that the Opposition went on and on about when attacking family credit is now the basis for one of the charges that we make against working families tax credit. We regard it as a serious mistake. It takes the policy of helping people who are receiving low earnings in entirely the wrong direction. It is cumbersome, it is badly targeted, and it increases marginal rates for many families. It imposes a new burden on employers, and it poses the risk about which the Government, when in opposition, claimed to be worried in relation to family credit—the risk of benefit abuse by employers.
In supporting the Lords amendment and opposing the Government's attempt to reverse it, we are concentrating on one small aspect of the system. We want single parents receiving this benefit to have the option of receiving it directly, rather than through the pay packet.
The Paymaster General advanced a series of arguments in defence of the Government's position. She advanced them briefly just now, and she advanced them in Committee. One of the arguments is that there is a problem of stigma. We are told that it is important for people to be forced to receive the benefit through the pay packet, because otherwise it will be stigmatised and they will be reluctant to claim it.
If family credit suffers so badly from stigma, why is it that approximately 90 per cent. of single parents who are entitled to it are claiming it? If we are to be told that there is that problem of stigma, what evidence from the real world is the Minister able to offer that it exists as a problem? On the contrary: the evidence is that, if 90 per cent. of single parents are collecting family credit, there is no problem of stigma.

Dawn Primarolo: I congratulate the hon. Gentleman on his promotion to the Opposition Front Bench, and appreciate that he is formidable in his speeches. However, does he accept that families who are desperate for an income will take the money regardless of whether they are stigmatised by so doing, and that stigma will not therefore affect take-up? He is talking about two separate issues: the need to receive the money; and an attitude to how it is paid.

Mr. Willetts: I understand the point that the Minister is making, and had planned to deal with it later in my speech. Nevertheless, my response to the argument is that the best way of judging whether there is stigma—in the sense in which the Minister refers to it—is to give people the choice. If they are concerned in the way in which she describes, they will opt to be paid through the pay packet, as there would be absolutely nothing to stop them from doing so. Alternatively, they could be paid direct.
My hon. Friend the Member for Gainsborough (Mr. Leigh) is in the Chamber. I hope that he will not mind if I say that, on this occasion, the great advantage of our proposal is that it is a permissive measure: all it


would do is give people the option. It is the Government who are trying to force people to take one route rather than the other.
All we are saying is that we do not know what concerns people more. They may prefer to receive money through the pay packet, in which case they could choose that route; or they may prefer to receive the money direct, in which case they could choose that route. The onus is on the Minister to explain why she wants to compel them to take the money one way rather than the other.

Dawn Primarolo: As the hon. Gentleman said, we are reaching the end of our consideration of the Bill. Does he accept that the purpose of the tax credit is to provide a work incentive and to reinforce the rewards of work, and that, throughout our consideration of the Bill, that has been our central argument in support of the Bill?

Mr. Willetts: The argument that we have to boost in-work incentives does not mean that we have to compel people to receive the payment in a specific way. We could perfectly well create work incentives without simultaneously imposing on people the requirement that they must be paid the benefit in one way rather than another.
If the Government care so much about work incentives, it is a pity that they are increasing marginal rates by so much for so many families—as that could well have the perverse effect of reducing incentives to work among precisely the group whom Ministers are claiming they want to help: middle-income families.
The Opposition believe that the minimum the Government should do is give people the choice. If the Minister believes in what she is saying, she should have no problem with Lords amendment No. 2. If the Government were to accept it, they might find that, miraculously, everyone is perfectly happy to be paid through the Government's preferred route of the pay packet. However, if by any chance some single parents are not happy with that route, why not give them the option of being paid direct? That is all the amendment proposes allowing.
I should perhaps briefly comment on another point made by the Minister—that, in the amendment, we are making a special proposal for single parents, and that there are no proposals on how the benefit should be paid to couples that would provide any type of precedent. I felt that, on that, her argument was disingenuous. When a married couple decide whether payment should be made to the working partner or to the non-working partner, they are essentially also deciding whether the payment should be made through the pay packet or direct, as that will be one of the consequences of their decision.

Dawn Primarolo: The hon. Gentleman misunderstood the point that I was making. Lone parents—who are the only parent in the family and, by definition, the only working parent—should be compared with a family with two working parents. If both parents are working, either can receive the money through the wage packet. The only choice is which of them receives it. That choice is not necessary for lone parents. I am happy to send the

hon. Gentleman the references from the Rowntree research, which has been quoted on the record before, that identify the problem of stigma.

Mr. Willetts: For married couples with only one partner working, the choice of who receives the payment of the working families tax credit will effectively be a choice between the payment going through the pay packet or directly to the non-working partner. Although some two-earner couples will qualify as the working families tax credit is extended, most people receiving family credit or the working families tax credit are one-earner couples or single parents. There will not be many two-earner couples.
All we are asking for single parents is an option that is available to the other large category of recipients of the working families tax credit: the choice of whether it should be paid through the pay packet or not. The Paymaster General says that it is simply a decision between the working or the non-working partner, but in practice it is a decision on how the payment should be made. We are simply asking for single parents to have the same provision as—thanks to the effective parliamentary scrutiny of the Bill—already exists for couples where one partner is not working.
The Paymaster General has not explained why her preferred method of payment has to be compulsory. She has not explained why she wants to force people down one route rather than giving them the choice of two different routes. I am afraid that the explanation is simple. There are some pig-headed people in the Treasury who believe that they should impose what they think is the earned income tax credit model on Britain regardless of the practical evidence of the success of family credit and widespread concerns about the implications of the working families tax credit.
There are concerns about the marginal rate, burdens on businesses and the issue of wallet versus purse. It is deeply disappointing that the Government have not listened in the way we did when we introduced our measures. The Paymaster General will come to regret her refusal to consider our valid, pragmatic and sensible proposals to improve the current muddled policy.

Miss Kirkbride: It gives me great pleasure to follow my hon. Friend the Member for Havant (Mr. Willetts). I add my congratulations on his promotion to shadow Secretary of State for Social Security. He will offer great wisdom on the issues, following other honourable and wise contributions in the past.
I sat for many hours in Committee and throughout the Bill's proceedings in the House. The Government still have not explained why they believe that the working families tax credit will be an incentive to work. When the Select Committee on Social Security considered the issues, we took evidence from Martin Taylor, the architect of the Government's proposal and then chairman of Barclays bank. We closely cross-examined him on whether there would be added incentives to work if we transferred from the very successful family credit system that tops up low wages to a working families tax credit. He offered nothing more than his prejudices that there would be. The Government have offered no evidence on why a tax credit rather than a benefit will be an incentive to take a job. That of course is predicated on the idea that


single parents should be paid family credit by the Post Office instead of being forced to claim working families tax credit, which is paid through the wage packet.
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There is a flaw in the argument which has not been addressed by the Minister or her colleagues. We are facing a fundamental reform of our tax and benefits system that is based on the prejudices of those who are introducing it, not on the serious empirical evidence that it will have a major impact on the low-paid sector.
As my hon. Friend the Member for Havant said, there is stigma on both sides. A huge number of people claim family credit. If the object of introducing a benefit is that people should take it up as it will improve their lives, family credit is extremely successful, as it has the highest take-up rate in the entire benefits system. I take issue with the Minister when she says that that does not mean that there is no stigma attached to it. The take-up rate would suggest otherwise.
My hon. Friend made a valid point when he was challenged on the matter. He said that introducing choice to the system would establish once and for all whether there was a stigma attached to family credit. The only pure experiment would be to give single parents the choice, as married couples may have a different incentive to take a benefit rather than a tax credit—involving wallet-versus-purse issues. We should give single parents the choice between family credit and working families tax credit and find out whether there is a stigma attached to family credit.
The reverse may also be true. Those claiming working families tax credit could suffer the stigma of being on benefit. At present, other employees in the workplace are unaware that someone is claiming family credit. In many instances, employers are similarly unaware, although some may need to be informed of a claim. If people are to be exposed in the workplace as being on benefit because of the method of payment of the working families tax credit, that would increase the possibility of stigma rather than detract from it.

Mr. Pickles: Does my hon. Friend agree that the principal difference between family credit and working families tax credit is that the employer is informed just once that an employee has claimed family credit and thereafter has no idea what the position is? Under working families tax credit, the position will be continually assessed. The amendments would allow single-parent claimants to retain some privacy.

Miss Kirkbride: My hon. Friend is right. The fact that he and I sat through the Committee's discussions on this point means that we are in unison on it. The employer will be aware of a claim for working families tax credit and, given the nature of these things, it is likely that other employees will be made aware of it. The employer will have to be aware of the situation continually, in a way that he or she is not with family credit.
The arguments about stigma are not as one-directional as Treasury Ministers believe. There is a strong argument that stigma will operate in a more profound way as a result of paying the benefit—that is what working families tax credit will always be, whatever language we use—via working families tax credit, rather than family credit.
There is also a question of fairness. If couples want to choose how the benefit is paid, that should not become a form of discrimination against single parents, whose options—by definition—are more limited in terms of their ability to operate their lives, their business and their finances. The measure is open to couples for reasons concerning wallet-versus-purse issues—an option that the Government do not like having to offer. Some Labour Back Benchers might have been upset had the wallet-versus-purse issues not been addressed by creating the opportunity for choice.

Dawn Primarolo: I am following the hon. Lady's argument closely. She appears to accept that there is not a transfer from purse to wallet, and that the Bill has dealt with the issue. Does she therefore disagree with her Front-Bench colleagues?

Miss Kirkbride: The short answer to that is no.
Another worry is that people may fear that they are less likely to get jobs or to be offered employment if they are likely to be beneficiaries of working families tax credit. Most employers will be capable of working out who among those applying for a job are likely to be recipients of family credit or working families tax credit. There are circumstances where, because of the administrative burden, some employers might prefer to take someone on who is less likely to become a recipient of working families tax credit.
If there is a choice of potential employees, that will become a form of discrimination against single parents, who do not have the option of taking up the benefit in the form of family credit paid by the Post Office, and are forced to take it as working families tax credit, paid via the employer. It would be difficult to prove a case of discrimination in circumstances where there had been, to all intents and purposes, a perfectly reasonable selection of candidates, but where those who were not likely to be recipients of working families tax credit—or who had the option of not being a recipient—were actually taken on.
We must remember that not all employers are model employers. There will be some who find it difficult to operate the scheme—they may wilfully find it difficult to operate. Some may even see fit to run off with the money that the Treasury gives them as a float to pay the working families tax credit.
Vulnerable people who are eligible for top-up on their wages, and who used to be able to rely on payments from the Post Office every week, will be completely reliant on their employer, so when there is uncertainty about the employer's probity or competence there could be a disincentive to work, through the fear of being left with nothing at the end of the week.
The Government are keen to get single parents out to work, and giving them the option of saying that they want their family credit to be paid as it has always been paid, so that they can rely on its being there when they need it and they will not be left vulnerable at the end of the week or month, would be a great service to them. It would keep them in the driving seat and leave open all the options available to them, by contrast with the rather patronising view of the Government, which forces them to go in one direction.

Mr. Webb: It is a pleasure to follow the hon. Member for Bromsgrove (Miss Kirkbride), who made an important


contribution to our scrutiny of this matter in the Social Security Committee, and the distinguished hon. Member for Havant (Mr. Willetts). Our paths have crossed in the sheltered world of academia, and I look forward to their crossing many more times. His first contribution in his new role showed clearly why he has such an enviable reputation.
The Minister has propounded a strange doctrine: that it is in lone parents' interest to be denied a choice, presumably because they might make the wrong choice and choose to have their money paid direct to them rather than being mediated through the employer. It is almost impossible to imagine any model of human behaviour in which that is true, other than when the individual concerned is stupid. Only in that case should the Government step in and insist that one option be taken rather than another.
I am sure that, in a different setting, the Minister would tell us that lone parents are far from stupid, that their role is often challenging and demanding as they juggle work and family responsibilities, and that many of them make a superb job of it. That being so, why cannot those able people be trusted to make the simple choice about how to get their money?
The Minister said that the point was to drive home the message about making work pay. That goes back to people being stupid, because if they want to they can have their family credit paid direct into their bank account, just as they can have their salary paid direct, and every month they will get a bank statement showing two elements that will not appear if they do not work: the pay and the tax credit. Unless they are as thick as two short planks they will notice that both appear when they work, and neither when they do not.
Forcing the two elements to appear as one figure on the bank statement does not in any sense demonstrate that work pays. Indeed, given that people may not scrutinise their pay slip as well as they scrutinise their bank statement, the presence of two separate entries on the bank statement might spell it out more clearly that the credit is a benefit of working.
The Minister gave two reasons why the argument for choice for lone parents should fall. She said that there was no issue of confidentiality involved in payment through the pay packet. We are dealing with lone parents, many of whom do not remain lone parents. Some of them, to use the jargon, re-partner; they do not necessarily marry, but become part of a new partnership. The new partner's income would have a bearing on the lone parent's family credit entitlement, so the employer would get a letter from the Inland Revenue saying that the amount payable had changed. The employer would know that the lone parent's income had not changed and the employer would also know—because they had not paid any maternity pay—that she had not had a child; so the employer would know that the she had experienced some other change, such as re-partnering.
What business is that of the employer? If family credit was being paid, the employer would not know, and if the lone parent could opt to have the tax credit paid direct, the employer would not know. It is only because payment has to be made in this doctrinaire way that employers will be aware of any change.
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The Minister also said that an employer could not work out from the amount of tax credit payable what the family circumstances of the lone parent were. The Minister will correct me if I am wrong, but I understand that in about a third of tax credit cases the maximum credit is paid. The Minister also mentioned tapers, but they would be irrelevant. She also mentioned child care costs, but she cannot have it both ways. Most of the time she tells us that the child care tax credit will not cost a fortune because not many people will take it up, but if lots of people do take it up, the cost will be much greater than the Government have budgeted for.

Dawn Primarolo: The hon. Gentleman is being unusually imprecise in his argument. I have every sympathy with lone parents and I was a lone parent myself for some time so I do not need the hon. Gentleman to instruct me on that issue. He knows that work incentives are at the heart of the Bill and are its purpose. It is thus entirely appropriate that the Government should ensure that that policy is delivered.
On the issue of choice, lone parents are capable of seeing exactly what their income is on their wage slip as easily as on their bank statement.

Mr. Webb: We should let those last words hang in the air for a moment. In other words, lone parents do not need to have the tax credit paid to them through their pay packets to demonstrate to them the benefits of working. In a fulsome intervention—which I hope presages a response to the debate, instead of nodding it through—the Minister said that she was a lone parent. I put a rhetorical question to her: when she was a lone parent, would she have needed the state to force her to take the tax credit through the pay packet to demonstrate to her the benefits of work? I put it to the House that she would not. As an intelligent woman, she would not have needed that, so why does she insist in forcing it on other lone parents?
My final point concerns discrimination by employers and whether lone parents, with no choice about how the tax credit is paid, might find themselves discriminated against as tax credit recipients. The Minister said that the majority of employers are good employers, and I am sure that that is true, but that does not mean that the Government will not create problems for lone parents who work for the minority of poor employers.
If a lone parent works for a poor employer or applies for a job with one, why should she not be able to exercise the choice? My noble Friend Lord Goodhart put that point well in the other place:
Faced with the choice between two more or less equal potential employees, the employer will go for the one who will not cost the extra £370, or more time with a wet towel at the kitchen table."—[Official Report, House of Lords, 4 May 1999; Vol. 600, c. 553.]
That resonates with an earlier debate, and so does the reference to the kitchen table—for the Conservatives.
The Minister pointed out that a provision had to be built into the Bill to prevent discrimination, so the Government must believe that it is a real threat. Why should lone parents be subject to it? It is pure sophistry to argue that married couples will not exercise a choice between the pay packet and direct payment. It is clear that that is exactly what they will do when they decide who is to get the money. Lone parents should not be denied that choice.


They are intelligent people and should be able to make intelligent choices about what is in their own interests. I support the Lords in their amendment.

Mr. Edward Leigh: I am grateful to my hon. Friend the Member for Havant (Mr. Willetts) for convincing me in his formidable speech that occasionally a permissive society is to be preferred. I also have sympathy for the Minister, who has been given an impossible case to argue by her masters. A good Minister can argue such a case, and the hon. Lady has done her best. It is an impossible task, however, as all we are arguing for is a degree of choice.
There has been much debate about the alleged element of stigma. I need not repeat the cogent arguments that have been made but, as my hon. Friend the Member for Bromsgrove (Miss Kirkbride) said, Martin Taylor, one the scheme's architects, was unable to produce any evidence to the Select Committee on Social Security that stigma was a factor militating against the take-up of child benefit. He told the Committee that hard-and-fast evidence in non-financial and psychological matters such as stigma was difficult to come by.
That is a very honest statement and cannot be bettered. No one knows how much stigma is involved in take-up of family credit. However, we know that those who are entitled to take it up are not put off by considerations of stigma.
The Minister has said that desperate people have no choice but to take up the benefit as it is currently paid, but my hon. Friend the Member for Havant responded that they should have a choice, and my hon. Friend the Member for Bromsgrove said that the market should decide. The reality is that the Government are imposing this method of take-up as part of a wider political agenda. They want to move towards some type of negative income tax system, in which no one receives benefits.
The stigma does not apply to people who take up benefits under the current system, but to the Government. They are stigmatised by political observers, who see that an ever-increasing proportion of the population receives benefits. The Government's response to that undoubted social and economic problem is to say, "We will ensure that people receive the same money, but not as a benefit. It will now be paid as a tax credit. We have solved the problem of poverty. We have ensured that the many millions of people who have come off the unemployment or poverty registers have been encouraged to take low-paid or part-time work and receive their benefit through the pay packet."
I understand why that is good for the Government's reputation, but I am not convinced that it is good for the people receiving the benefit, who include some of the most vulnerable in society. As we know, 79 per cent. of lone parents take up family credit.
My secondary point has not been addressed by the Government, and has to do with the position of very small employers. The measure will present no problem for large companies, but many lone parents' work is part time or variable. Their circumstances change and they often work for very small employers. I understand the Government's argument that people in regular employment whose circumstances do not change—or people working for a large employer who knows nothing about their circumstances—present a problem for employers, in that it

may be impossible to work out the details of their life styles from the tax code. However, people's circumstances often change, and very small employers may be very familiar with aspects of their employees' lives.
I once stood behind a clerk handing out family credit in a social security office. We know that people, in order to receive family credit, already underclaim deliberately or pretend to be getting less money than is in fact the case. The worry is that there will be more collusion between employees and employers.
That collusion is evident in the rag trade in the east midlands. A case with which I am familiar provides a good example. A person with a large number of children filled in a benefit application form. Although that person worked 40 or 50 hours a week, the figure given for earnings seemed absurdly low. Such collusion already goes on to a large extent, but it would be made worse if lone parents are to be enmeshed ever tighter in the grip of employers.
So it is not a question merely of the stigma or unfairness suffered by the employee, but of the society that the Government want to create. There is one way out of the impossible position in which they have placed themselves—they should accept the amendments.

Mr. Tim Collins: I welcome the chance to contribute to what has been an excellent debate. One of the most pleasant features has been the gentle way in which the Minister has sought to engage in the argument and to respond to points made in interventions. I pay tribute to her and look forward to what she has to say later. If her response is made in the same spirit as her earlier contributions, I hope that we shall get a more genuine reply than has been the case with other Ministers and other debates that I have witnessed in the past year or so.
However, I very much regret three things about this debate. The first is that we are having it at all, as my hon. Friend the Member for Gainsborough (Mr. Leigh) noted. The amendment is quite justified, and the Government should have accepted that it represented an opportunity to think again and to accept that the revising Chamber had improved the Bill. There would then have been no need for this debate.
The second cause for regret is that there has been no contribution from Government Back-Bench Members, even though the Government have said consistently that this was a flagship Bill. It was announced last autumn, and was said to be the centrepiece of the Queen's Speech and the Budget. As I speak, there are four times as many hon. Members on the Conservative Back Benches than there are on the Government Back Benches. That is an odd way to launch a flagship. Perhaps the Mary Rose was launched in that way, but the Paymaster General will recall what happened to that vessel. I hope that archaeologists 500 years in the future will not be salvaging the record of this flagship.

Miss Kirkbride: Given what he has just said, my hon. Friend may be interested to know that, although the Whip ensured that Labour Members physically attended the Committee deliberations, their audible presence was non-existent. I do not recall any of them contributing to our deliberations.

Mr. Collins: I am grateful to my hon. Friend, whose contribution to the Committee's proceedings was as


distinguished as her contribution this afternoon. I was the Whip on that Committee. I employed the gentle, laissez-faire touch that is typical of the Conservative party and its Whips Office, and it is with great pleasure that I can confirm that it was not necessary to gag any Conservative Member. The Government Whip seemed to gag Labour Members, but they may simply have had nothing to say in support of the Bill.
My third regret about the debate is that I find myself in the uncomfortable and unusual position of having to disagree with my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles). That is very sad, and deserves a rapid explanation. I disagree with my hon. Friend because he said that the only real difference between family credit and the working families tax credit was continuous assessment and its affect on stigma. In fact, the principal difference is that family credit is a benefit, which pretends to be nothing else, while the working families tax credit is a benefit pretending to be a tax cut, which it patently is not.
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WFTC should be administered by the Department of Social Security. We have been graced by the presence of the Paymaster General, to whom I pay tribute, but she should not be here. A Social Security Minister should answer for the Government.

Mr. Deputy Speaker: Order. The amendment is more narrow than the hon. Gentleman's point as it relates to whether the credit should be paid through the wage packet or in some other way. Perhaps the hon. Gentleman would talk about that.

Mr. Collins: I am most grateful, Mr. Deputy Speaker, and shall do as you say.
The Paymaster General said that the amendment should be rejected because employers would not exploit or abuse employees. She engaged seriously in the argument about stigma, but said emphatically that it did not hold water and that there was no likelihood of employers using information gained from the working families tax credit against single parents or other employees.

Dawn Primarolo: I said that the majority of employers were law abiding and would discharge their duties under the Bill. However, the Bill includes provisions to deal with any who do not.

Mr. Collins: I am delighted by that clarification, which gives me yet another opportunity to agree with the Paymaster General. The vast majority of employers are wholly law abiding. Good employers recognise that their prospects are much enhanced if employees are treated well, even if it is odd to hear that said by a member of a Government who are imposing a raft of requirements on employers, such as the minimum wage and the social chapter.
The Financial Times—not exactly the in-house journal of the anti-capitalist league and hardly renowned for its anti-employer sentiments—has opined that the Bill poses the risk that some employers will use information about their employees unscrupulously. I go no further than to

say that there is a possibility that that will happen. It follows that some single parents fear that it will, and it would be sensible to give them the option of relieving their fear. Information can never be used against them if it never comes to the attention of their employers.

Mr. Leigh: No one knows for sure whether my hon. Friend is correct, but every CBI survey suggests that up to a third of employees who claim family credit do so without their employers' knowledge. Many employers have no idea that their employees receive family credit, but all of them will know under the new system.

Mr. Collins: My hon. Friend is entirely right, once again displaying his knowledge and commitment on these matters.
There is every reason why the Government should grant the concession contained in the amendment to allow single parents the ability to choose.

Mr. Pickles: I am afraid that my hon. Friend misreported me a few moments ago. When he was a Whip, I thought of nominating him for the Rin Tin Tin award for the quality of his speeches. I did not suggest that continuous assessment was the only difference, but that it was the only difference as far as the employer would be concerned.
My hon. Friend has talked about bad or unscrupulous employers, but honest mistakes can happen regarding benefit. What tension will exist between employers and employees when the wrong amount of benefit is paid or where benefit is withheld? What kind of reaction—

Mr. Deputy Speaker: Order. The hon. Gentleman's intervention is too long.

Mr. Collins: Perhaps Rin Tin Tin might reply to my hon. Friend. My misquotation of his views was entirely unintentional and I appreciate that he was referring only to one of the many reasons why family credit is superior to the working families tax credit. My hon. Friend's point is a good one. Difficulties may arise from disclosure of information by an employer. Honest mistakes may be made, leading to wrong payment, underpayment or overpayment.
It is conceivable that the financial records or circumstances of a business or employer could be inadvertently disclosed to others. Often, a small and growing business, started by a husband and wife, will expand slowly, employing a few people—friends of the family perhaps. Even businesses that employ six to 10 people process financial information on the kitchen table belonging to the principal partner or director, and papers could easily be left lying around to be seen by people who, in a splendid multinational corporation, would not have access to such personal financial information.
The amendments would prevent the possibility—rare, but not impossible—of financial information being seen by someone who goes into the kitchen for a cup of tea or a bacon and egg sandwich at the end of the day. Having spilt his or her coffee over paper work, that person might find financial data that would enable him or her to work


out the financial circumstances of someone who works for the company. The amendments would remove the anxiety that arises from the existence of such a possibility.

Mr. Willetts: My hon. Friend makes valid points about the effect of the Bill on the employer. However, single parents are also affected. A single parent may work for several employers on short-term contracts, and it would be reasonable for that person to ask for direct payment rather than face the hassle of payment through several employers.

Mr. Collins: I agree with my hon. Friend. The circumstances that he described, with a single parent working for several different employers, are precisely those in which single parents could be defensive and worried about having to tell Uncle Tom Cobbleigh and all personal details about their private lives. That would be especially true if they all lived in the same village or small area. There is an important requirement for privacy. The matter may even be covered by the European convention on human rights.

Miss Kirkbride: My hon. Friend raises an interesting point. Could it be a criminal offence to pass on personal information about wages given to employees? It is true in this place, and in every place that I have worked, that some of the more entertaining conversations concern one's colleagues. Their pay and family circumstances might be interesting factors. Would it be improper, or even an offence, for a wife or husband to pass on such personal details?

Mr. Collins: I am grateful to my hon. Friend. As a former Whip, I assure her that there has never been any tittle-tattle in this House. The very suggestion is outrageous. I see that the Government Front Benchers are nodding vigorously. One can only hope that that is noted outside. I am not a lawyer and so cannot tell her whether criminal offences might arise. Most of the single parents affected are unlikely to be lawyers and may not know the legal position. They will be confused and might prefer to have the option that we propose.
It is that option that leads me to my next point. Our society is moving into an era in which the Prime Minister and other senior Ministers have told us that the nature of our economy will mean that more and more things will depend on individuals being able to exercise more and more choice about their personal lives. If the Prime Minister means that, I welcome it. The Conservative party has always believed in choice and that individuals should be treated as adults.
I welcome what the hon. Member for Northavon (Mr. Webb) said about the presumption that seems to lie behind the Government's intentions—that single parents should be treated as incapable of making correct choices about their lives. I prefer to think that this is an oversight by the Prime Minister, like many other things that he has not been able to notice recently, such as the European election campaign. As his attention returns to domestic policy, he will realise that the amendments would give him the opportunity to turn his rhetoric into reality and demonstrate that he is really committed to free choice and individual liberty.
The Paymaster General once again made a delightful contribution but there may be a Government reshuffle, so the Conservatives are seeking to rescue her from what

might be a devastating personal mistake in going against the direction in which the Prime Minister says that he wants to lead his party and Government. She is seeking to close options and perhaps she should not be. I give her that free career advice for what it is worth.
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We should move on to discuss some of the other sadnesses reflected in this debate. One that has caused me particular pain is the fact that the Government did not give the minimum commitment that it seems reasonable to ask: that they will review the matter. It is conceivable, I put it no higher, that the Government may have the numbers tonight to prevail. I do not know. If they do, they are not sitting here. They may be elsewhere so when the Division bell rings, they will flood in to give the Government another narrow victory. In the earlier Division, barely 300 Labour Members bothered to turn up. More than 25 per cent. of Labour Members withheld their support for the Government's position. These things snowball. Their majority might slump even further.
Let us presume that the Government will prevail. Why have they not said that they would seek to review the matter after five or 10 years so that we could see whether our arguments or theirs had stood the test of time? It is possible—we should all admit this in politics—that we are wrong. I openly concede it. After 10 years, it is possible that the Government will prove to have been correct and single parents will dance happily around the streets.

Dawn Primarolo: I thank the hon. Gentleman for all his kind comments and advice, of which I take note. I am delighted that he expects the Government to be here for at least 10 years. I am sure that at the end of that time, we will be able to demonstrate that our policy is correct. I look forward to giving him some advice then.

Mr. Collins: That is very sweet of the hon. Lady, but perhaps 25 per cent. of her parliamentary colleagues were not here for the earlier vote because they are desperately going round the constituencies that they lost in the European election.

Mr. Pickles: It was more than 25 per cent.

Mr. Collins: It was, but before you admonish me, Mr. Deputy Speaker, I will not follow the hon. Lady down the seductive path of considering the thumping majority that my party will secure at the next general election. I shall return to the narrow points that we are discussing. If she is so confident about winning the next general election and letting her policies stand the test of time, why will she not say that she is prepared to review the matter?

Miss Kirkbride: I thank my hon. Friend for being so generous in giving way. Another reason why the Government might want to review the matter crossed my mind. The post office network may be in difficulty soon because of the cancellation of the main contract for paying benefits through a computerised system. We all know from representations from our sub-postmasters and others that they are concerned about their future business. The


payment of family credit, when people choose to collect it from local post offices, is one way in which their business could be promoted.

Mr. Collins: My hon. Friend introduces an important dimension into the debate. She is right that if the legislation is passed, the post office network would suffer yet another blow from the Government on top of the many delivered to it since May 1997. As she rightly says, the introduction of the working families tax credit, which will be paid through the wage packet, to replace family credit, which is often paid through the post office, will hit the rural post office network in particular. I represent a very rural constituency in south Cumbria, and my constituents would deeply regret yet another withdrawal of rural services by a Government who, despite their rhetoric, have repeatedly demonstrated that they have little understanding and less sympathy for rural issues and areas.

Mr. Leigh: As a former Whip, will my hon. Friend confirm that there is not the slightest chance of the Minister accepting the excellent arguments that have been adduced this afternoon, not least because—ironically—Labour spent much time in opposition criticising the Government for allegedly massaging the employment figures but is now massaging people off benefits into so-called tax cuts?

Mr. Collins: My hon. Friend is right and brings me to another point. What is the motivation behind the legislation and the Government's determination to resist these very fine Lords amendments? It is simply that they wish to transfer several billion pounds of expenditure from the expenditure side of the column to the tax reduction side. Then they hope that they can claim to be a tax-cutting Government, when all that they are is a spending-shuffling Government. That is the underlying motivation. The reason why they are resisting the attempt by their lordships to improve the legislation is that they do not want any scrutiny of this dodgy piece of work. They want it to sail through with the minimum of publicity and they simply do not want anyone to inquire into the detail.
The Government have demonstrated in the debates on Second Reading, in Committee and at various other stages, including today, that they are not very focused on anything other than the so-called big picture. All that they have really said is, "Well, the Bill is about providing incentives to work. If you are not in favour of the Bill, you are not in favour of incentives to work so therefore you are in favour of unemployment." That, albeit in the most charming of ways, has been the only argument that the Paymaster General or anyone else has advanced in our proceedings. I am afraid that that will not do. Legislation has to be examined in detail.
I come to what is perhaps the clinching argument in favour of the amendments made by the other House. During the debates in this Chamber in the past year we have heard time and again how the other place needed to be reformed because it was out of touch, arrogant and ancient; that it was a Chamber composed of people who had no sympathy for the way in which society was changing; that it was loaded on one side of industry

because it was composed of people who sympathised with business rather than with employees. Yet the other place, unreformed as it is up to this time, has made amendments that would strengthen the hand of single parents—that group in society that has evolved and grown in recent years—against that of unscrupulous employers, while this democratic Chamber will be whipped by the Government to vote against single parents and for the opportunity of unscrupulous employers to take information away from them.
This afternoon, the Government have completely, wholly and unapologetically demolished not only their case for the Bill but their case for reform of the House of Lords.

Mr. Pickles: It is a pleasure to see the Financial Secretary here with us, no doubt to defend what she sees as the phantom menace that the proposals represent to her Bill. As my hon. Friend the Member for Westmorland and Lonsdale—and all the nice bits of the lake district—(Mr. Collins) said, there is a real irony in the way in which the House of Lords has stood up for amendments Nos. 1 and 2. There were lots of things that could have been sent back to this House, but the Lords were more sparing and more precise. They gave us an opportunity to rethink on business, and we did not do so, to our cost. It is important that we rethink on lone parents because the amendments will give them an opportunity to exercise choice about how they are paid.
We recognise that people in receipt of the working families tax credit, especially those working in small businesses, may be discriminated against because of the additional cost that businesses will have to bear. Lone parents are particularly vulnerable to loss of employment, in the same way as a single-earner couple is vulnerable. When an employer is faced with the prospect of someone in receipt of the working families tax credit or someone who is not, he may plump for the person who is not. That is why in schedule 2—I am sure that you have taken a great interest in schedule 2, Mr. Deputy Speaker—we make it an offence for someone to discriminate against people in receipt of the credit.
The Bill will give employers almost the ownership that 19th century mill-owners had of their work force. Like in the 19th century, they will have a clear view of what is happening in each family. The hon. Member for Northavon (Mr. Webb) made a number of valid points on that, which I will not repeat.
There is another aspect of privacy. Many people, especially those on low incomes, have more than one job. They may have a full-time job and a part-time job. They do not necessarily want their employer to know that they are engaged in a different job in the evening. Under the Bill and the regulations, the employer who pays the largest sum will be responsible for administering the working families tax credit, so employers will know at a glance whether the employee is receiving additional income. That is why the amendment is so important. It would give the lone parent the opportunity to say that they would like to receive the credit directly from the Revenue.
We heard earlier that the CBI—an organisation that the Paymaster General slavishly follows and is pleased to receive help from—considered that the amendment would strengthen the Revenue because the cheque would come from it in the same way as people receive rebates.


The hon. Lady has a number of points to respond to in the few remaining moments of the debate and I look forward to hearing what she has to say.

Dawn Primarolo: I thank the hon. Gentleman for welcoming back my hon. Friend the Financial Secretary to the Treasury, who has been released from the Finance Bill Committee on its completion. It is a bit like "The Return of the Jedi", or should I say, "May the force be with me."
I am sure that the hon. Member for Westmorland and Lonsdale (Mr. Collins) will enjoy reading his speech as much as we enjoyed hearing it, although the direct relevance to the amendment I struggled at times to see. I know that he was always in order, Mr. Deputy Speaker, because otherwise he would have been reprimanded. I am grateful for the number of times that he said what a nice person I was. I do not know whether that damages his career or mine.
The hon. Gentleman made a number of points about discrimination. As I said in my speech and in an intervention in his, the majority of employers behave properly now and will continue to do so. It is difficult to see how discrimination could be in advance, but discrimination against someone who is employed has been referred to several times in the debates in this and the other House. Clause 7 specifically deals with that. Those are exceptional circumstances and we are by no means implying that every employer will behave in that way, but there is, quite rightly, protection in the exceptions which would result—

It being half past Six o'clock, MR. DEPUTY SPEAKER put the Question already proposed from the Chair, pursuant to Order.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 317, Noes 161.

Division No. 214]
[6.29 pm


AYES


Abbott, Ms Diane
Bradley, Peter (The Wrekin)


Adams, Mrs Irene (Paisley N)
Brinton, Mrs Helen


Ainger, Nick
Brown, Rt Hon Gordon (Dunfermline E)


Alexander, Douglas



Allen, Graham
Brown, Russell (Dumfries)


Anderson, Donald (Swansea E)
Browne, Desmond


Armstrong, Rt Hon Ms Hilary
Buck, Ms Karen


Ashton, Joe
Burden, Richard


Atkins, Charlotte
Burgon, Colin


Austin, John
Campbell, Alan (Tynemouth)


Banks, Tony
Campbell, Mrs Anne (C'bridge)


Barnes, Harry
Campbell, Ronnie (Blyth V)


Barron, Kevin
Campbell-Savours, Dale


Bayley, Hugh
Cann, Jamie


Beard, Nigel
Casale, Roger


Beckett, Rt Hon Mrs Margaret
Cawsey, Ian


Begg, Miss Anne
Chapman, Ben (Wirral S)


Bell, Stuart (Middlesbrough)
Chaytor, David


Benn, Hilary (Leeds C)
Clapham, Michael


Benn, Rt Hon Tony (Chesterfield)
Clark, Rt Hon Dr David (S Shields)


Benton, Joe
Clark, Dr Lynda (Edinburgh Pentlands)


Betts, Clive



Blackman, Liz
Clark, Paul (Gillingham)


Blears, Ms Hazel
Clarke, Charles (Norwich S)


Blunkett, Rt Hon David
Clarke, Rt Hon Tom (Coatbridge)


Boateng, Paul
Clarke, Tony (Northampton S)


Borrow, David
Clelland, David


Bradley, Keith (Withington)
Clwyd, Ann





Coaker, Vernon
Hood, Jimmy


Coffey, Ms Ann
Hoon, Geoffrey


Cohen, Harry
Hope, Phil


Coleman, Iain
Hopkins, Kelvin


Colman, Tony
Howarth, George (Knowsley N)


Connarty, Michael
Howells, Dr Kim


Cook, Frank (Stockton N)
Hoyle, Lindsay


Corbett, Robin
Hughes, Ms Beverley (Stretford)


Corbyn, Jeremy
Humble, Mrs Joan


Corston, Ms Jean
Hurst, Alan


Cousins, Jim
Hutton, John


Cranston, Ross
Iddon, Dr Brian


Crausby, David
Illsley, Eric


Cryer, John (Hornchurch)
Jackson, Ms Glenda (Hampstead)


Cummings, John
Jackson, Helen (Hillsborough)


Cunningham, Jim (Cov'try S)
Jamieson, David


Dalyell, Tam
Jenkins, Brian


Darvill, Keith
Johnson, Alan (Hull W & Hessle)


Davey, Valerie (Bristol W)
Johnson, Miss Melanie (Welwyn Hatfield)


Davidson, Ian



Davies, Rt Hon Denzil (Llanelli)
Jones, Barry (Alyn & Deeside)


Davies, Geraint (Croydon C)
Jones, Mrs Fiona (Newark)


Dawson, Hilton
Jones, Helen (Warrington N)


Dean, Mrs Janet
Jones, Jon Owen (Cardiff C)


Denham, John
Jones, Dr Lynne (Selly Oak)


Dismore, Andrew
Jones, Martyn (Clwyd S)


Dobbin, Jim
Jowell, Rt Hon Ms Tessa


Donohoe, Brian H
Keeble, Ms Sally


Doran, Frank
Keen, Alan (Feltham & Heston)


Drew, David
Keen, Ann (Brentford & Isleworth)


Drown, Ms Julia
Kelly, Ms Ruth


Eagle, Angela (Wallasey)
Kemp, Fraser


Eagle, Maria (L'pool Garston)
Kennedy, Jane (Wavertree)


Edwards, Huw
Khabra, Piara S


Efford, Clive
Kidney, David


Ennis, Jeff
Kilfoyle, Peter


Fisher, Mark
King, Andy (Rugby & Kenilworth)


Fitzsimons, Lorna
King, Ms Oona (Bethnal Green)


Flint, Caroline
Kumar, Dr Ashok


Follett, Barbara
Ladyman, Dr Stephen


Foster, Rt Hon Derek
Lawrence, Ms Jackie


Foster, Michael Jabez (Hastings)
Lepper, David


Foster, Michael J (Worcester)
Leslie, Christopher


Foulkes, George
Levitt, Tom


Galloway, George
Lewis, Ivan (Bury S)


Gapes, Mike
Lewis, Terry (Worsley)


Gardiner, Barry
Liddell, Rt Hon Mrs Helen


George, Bruce (Walsall S)
Linton, Martin


Gerrard, Neil
Livingstone, Ken


Gibson, Dr Ian
Lloyd, Tony (Manchester C)


Gilroy, Mrs Linda
Lock, David


Godman, Dr Norman A
Love, Andrew


Godsiff, Roger
McAvoy, Thomas


Goggins, Paul
McCabe, Steve


Golding, Mrs Llin
McDonagh, Siobhain


Gordon, Mrs Eileen
Macdonald, Calum


Griffiths, Jane (Reading E)
McDonnell, John


Griffiths, Nigel (Edinburgh S)
McGuire, Mrs Anne


Griffiths, Win (Bridgend)
McIsaac, Shona


Grocott, Bruce
McKenna, Mrs Rosemary


Grogan, John
McNulty, Tony


Gunnell, John
Mactaggart, Fiona


Hall, Patrick (Bedford)
McWalter, Tony


Hamilton, Fabian (Leeds NE)
McWilliam, John


Hanson, David
Mahon, Mrs Alice


Harman, Rt Hon Ms Harriet
Mallaber, Judy


Healey, John
Mandelson, Rt Hon Peter


Henderson, Ivan (Harwich)
Marsden, Paul (Shrewsbury)


Hepburn, Stephen
Marshall, David (Shettleston)


Heppell, John
Marshall, Jim (Leicester S)


Hesford, Stephen
Marshall-Andrews, Robert


Hewitt, Ms Patricia
Martlew, Eric



Hill, Keith
Maxton, John


Hinchliffe, David
Meacher, Rt Hon Michael


Hodge, Ms Margaret
Meale, Alan


Home Robertson, John
Merron, Gillian






Michie, Bill (Shef'ld Heeley)
Short, Rt Hon Clare


Milburn, Rt Hon Alan
Simpson, Alan (Nottingham S)


Miller, Andrew
Singh, Marsha


Mitchell, Austin
Skinner, Dennis


Moonie, Dr Lewis
Smith, Angela (Basildon)


Moran, Ms Margaret
Smith, Rt Hon Chris (Islington S)


Morgan, Ms Julie (Cardiff N)
Smith, Jacqui (Redditch)


Morley, Elliot
Smith, John (Glamorgan)


Mountford, Kali
Smith, Llew (Blaenau Gwent)


Mudie, George
Snape, Peter


Mullin, Chris
Soley, Clive


Murphy, Denis (Wansbeck)
Squire, Ms Rachel


Murphy, Jim (Eastwood)
Starkey, Dr Phyllis


Naysmith, Dr Doug
Steinberg, Gerry


Norris, Dan
Stewart, David (Inverness E)


O'Brien, Bill (Normanton)
Stewart, Ian (Eccles)


O'Brien, Mike (N Warks)
Stinchcombe, Paul


Olner, Bill
Stoate, Dr Howard


Organ, Mrs Diana
Strang, Rt Hon Dr Gavin


Osborne, Ms Sandra
Stringer, Graham


Palmer, Dr Nick
Stuart, Ms Gisela


Pearson, Ian
Taylor, Rt Hon Mrs Ann (Dewsbury)


Pendry, Tom



Pickthall, Colin
Taylor, Ms Dari (Stockton S)


Plaskitt, James
Thomas, Gareth (Clwyd W)


Pollard, Kerry
Thomas, Gareth R (Harrow W)


Pope, Greg
Timms, Stephen


Pound, Stephen
Tipping, Paddy


Powell, Sir Raymond
Todd, Mark


Prentice, Ms Bridget (Lewisham E)
Touhig, Don


Prentice, Gordon (Pendle)
Trickett, Jon


Primarolo Dawn
Turner, Dennis (Wolverh'ton SE)


Primarolo, Dawn
Turner, Dr Desmond (Kemptown)


Purchase, Ken
Twigg, Derek (Halton)


Quinn, Rt Hon Ms Joyce
Twigg, Stephen (Enfield)


Quinn, Lawrie
Vaz, Keith


Radice, Giles
Walley, Ms Joan


Rammell, Bill
Ward, Ms Claire


Raynsford, Nick
Wareing, Robert N


Reed, Andrew (Loughborough)
Watts, David


Reid, Rt Hon Dr John (Hamilton N)
White, Brian


Robinson, Geoffrey (Cov'try NW)
Wicks, Malcolm


Roche, Mrs Barbara
Williams, Rt Hon Alan (Swansea W)


Rooker, Jeff



Rooney, Terry
Williams, Alan W (E Carmarthen)


Ross, Ernie (Dundee W)
Wills, Michael


Rowlands, Ted
Winnick, David


Roy, Frank
Winterton, Ms Rosie (Doncaster C)


Ruane, Chris
Wise, Audrey


Ruddock, Joan
Wood, Mike


Russell, Ms Christine (Chester)
Woolas, Phil


Ryan, Ms Joan
Worthington, Tony


Salter, Martin
Wright, Anthony D (Gt Yarmouth)


Sarwar, Mohammad
Wright, Dr Tony (Cannock)


Savidge, Malcolm
Wyatt, Derek


Sawford, Phil



Sedgemore, Brian
Tellers for the Ayes:


Sheerman, Barry
Mr. Mike Hall and


Sheldon, Rt Hon Robert
Mr. Jim Dowd.




NOES


Ainsworth, Peter (E Surrey)
Bottomley, Rt Hon Mrs Virginia


Allan, Richard
Brady, Graham


Amess, David
Brazier, Julian


Ancram, Rt Hon Michael
Breed, Colin


Arbuthnot, Rt Hon James
Brooke, Rt Hon Peter


Atkinson, Peter (Hexham)
Browning, Mrs Angela


Baldry, Tony
Bruce, Ian (S Dorset)


Beggs, Roy
Burnett, John


Beith, Rt Hon A J
Burns, Simon


Bercow, John
Burstow, Paul


Beresford, Sir Paul
Butterfill, John


Blunt, Crispin
Campbell, Rt Hon Menzies (NE Fife)


Body, Sir Richard



Boswell, Tim
Cash, William


Bottomley, Peter (Worthing W)
Chope, Christopher





Clappison, James
McLoughlin, Patrick


Clark, Dr Michael (Rayleigh)
Madel, Sir David


Clarke, Rt Hon Kenneth (Rushcliffe)
Major, Rt Hon John



Malins, Humfrey


Clifton-Brown, Geoffrey
Maples, John


Collins, Tim
Mates, Michael


Cormack, Sir Patrick
Mawhinney, Rt Hon Sir Brian


Cran, James
Michie, Mrs Ray (Argyll & Bute)


Curry, Rt Hon David
Moore, Michael


Dafis, Cynog
Moss, Malcolm


Davey, Edward (Kingston)
Norman, Archie


Davies, Quentin (Grantham)
Öpik, Lembit


Davis, Rt Hon David (Haltemprice)
Ottaway, Richard


Duncan, Alan
Page, Richard


Duncan Smith, Iain
Paice, James


Emery, Rt Hon Sir Peter
Paterson, Owen


Evans, Nigel
Pickles, Eric


Faber, David
Redwood, Rt Hon John


Fabricant, Michael
Robathan, Andrew


Fallon, Michael
Robertson, Laurence (Tewk'b'ry)


Fearn, Ronnie
Roe, Mrs Marion (Broxbourne)


Flight, Howard
Ross, William (E Lond'y)


Forth, Rt Hon Eric
Ruffley, David


Fowler, Rt Hon Sir Norman
Russell, Bob (Colchester)


Fox, Dr Liam
St Aubyn, Nick


Fraser, Christopher
Sanders, Adrian


Gale, Roger
Sayeed, Jonathan


Garnier, Edward
Shephard, Rt Hon Mrs Gillian


George, Andrew (St Ives)
Simpson, Keith (Mid-Norfolk)


Gibb, Nick
Smith, Sir Robert (W Ab'd'ns)


Gill, Christopher
Smyth, Rev Martin (Belfast S)


Gillan, Mrs Cheryl
Soames, Nicholas


Gorman, Mrs Teresa
Spicer, Sir Michael


Gray, James
Spring, Richard


Green, Damian
Stanley, Rt Hon Sir John


Greenway, John
Steen, Anthony


Grieve, Dominic
Streeter, Gary


Gummer, Rt Hon John
Swayne, Desmond


Hamilton, Rt Hon Sir Archie
Syms, Robert


Hammond, Philip
Tapsell, Sir Peter


Harris, Dr Evan
Taylor, Ian (Esher & Walton)


Hawkins, Nick
Taylor, John M (Solihull)


Hayes, John
Taylor, Matthew (Truro)


Heald, Oliver
Taylor, Sir Teddy



Heath, David (Somerton & Frome)
Thompson, William


Hogg, Rt Hon Douglas
Tonge, Dr Jenny


Howard, Rt Hon Michael
Tredinnick, David


Howarth, Gerald (Aldershot)
Trend, Michael


Hunter, Andrew
Tyler, Paul


Jack, Rt Hon Michael
Viggers, Peter


Jenkin, Bernard
Walter, Robert


Johnson Smith, Rt Hon Sir Geoffrey
Wardle, Charles



Waterson, Nigel


Jones, Nigel (Cheltenham)
Webb, Steve


Key, Robert
Wells, Bowen


King, Rt Hon Tom (Bridgwater)
Whitney, Sir Raymond


Kirkbride, Miss Julie
Whittingdale, John


Kirkwood, Archy
Widdecombe, Rt Hon Miss Ann


Laing, Mrs Eleanor
Wilkinson, John


Lansley, Andrew
Willetts, David


Leigh, Edward
Willis, Phil


Letwin, Oliver
Winterton, Mrs Ann (Congleton)


Lewis, Dr Julian (New Forest E)
Winterton, Nicholas (Macclesfield)


Lidington, David
Woodward, Shaun


Lloyd, Rt Hon Sir Peter (Fareham)
Young, Rt Hon Sir George


Loughton, Tim



Luff, Peter
Tellers for the Noes:


MacKay, Rt Hon Andrew
Mrs. Jacqui Lait and


Maclean, Rt Hon David
Mr. Stephen Day.

Question accordingly agreed to.

Lords amendment disagreed to.

Clause 14

PERSONS QUALIFYING FOR DISABLED PERSON'S TAX CREDIT

Lords amendment: No. 4, to leave out clause 14 and insert the following new clause—Persons qualifying for disabled person's tax credit—

(".—(1) Subject to subsection (6) below, section 129 of the Social Security Contributions and Benefits Act 1992 (disabled person's tax credit) and section 128 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (equivalent provision for Northern Ireland) shall be amended in accordance with subsections (2) to (5) below.
(2) In subsection (1), for "or (2A)" there shall be substituted (2A) or (2C)".
(3) In subsection (2)(a), for "56 days" there shall be substituted "182 days".
(4) After subsection (2B) there shall be inserted the following subsections—

"(2C) A person qualifies under this subsection if—

(a) the condition mentioned in subsection (2D) below is satisfied;
(b) a medical practitioner (within the meaning of the Administration Act) certifies, not more than 14 days before the date when the claim for disabled person's tax credit is made—

(i) that in his opinion the person will continue to have the disability in question for a period of at least six months; or
(ii) that in his opinion the person will continue to have that disability for the remainder of his life; and

(c) the level of the person's expected earnings is lower, by at least the required amount, than it would have been if he had not had the disability.
(2D) The condition is that there are 140 qualifying days, the last falling within the period of 56 days immediately preceding the date when the claim for disabled person's tax credit is made, which are days in respect of which—

(a) statutory sick pay has been payable to the person;
(b) the lower rate of short—term incapacity benefit has been payable to him;
(c) income support has been payable to him on grounds of incapacity; or
(d) earnings have been credited to him under regulations made under section 22(5) above.

(2E) For the purposes of subsections (2C) and (2D) above—

(a) the required amount, in relation to a person's expected earnings, is—

(i) 20 per cent of what those earnings would have been if he had not had the disability; or
(ii) if the amount given by sub—paragraph (i) above is less than the prescribed amount, the prescribed amount;

(b) qualifying days are days forming part of a single period of incapacity for work within the meaning of Part XI of this Act; and
(c) income support is payable to a person on grounds of incapacity if and only if he satisfies the condition in section 124(1)(e) above by virtue of being a person who—


(i) is, or is treated as, incapable of work for any purposes of this Act; or
(ii) is treated as capable of work by virtue of regulations under section 171E below.

(2F) Sections 3 and 112 above shall apply as if this section were included in Parts Ito V of this Act."

(5) In subsection (8), after "allowance" there shall be substituted ", or the level of a person's expected earnings,".

(6) In section 128(2E)(c) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992, as inserted by subsection (4) above, for "124(1)(e)" there shall be substituted "123(1)(e)" and for "171E" there shall be substituted "167E".
(7) In section 11(3)(b) of the Social Security Administration Act 1992 (repeat claims), for the words from "he" to "that paragraph" there shall be substituted—

"(i) he qualified under subsection (2) of section 129 of the Contributions and Benefits Act by virtue of paragraph (a) of that subsection, or of there being payable to him a benefit under an enactment having effect in Northern Ireland and corresponding to a benefit mentioned in that paragraph; or
(ii) he qualified under subsection (2C) of that section or of section 128 of the Northern Ireland Contributions and Benefits Act,".
(8) In section 9(3)(b) of the Social Security Administration (Northern Ireland) Act 1992 (corresponding provision for Northern Ireland), for the words from "he" to "that paragraph" there shall be substituted—

"(i) he qualified under subsection (2) of section 128 of the Contributions and Benefits Act by virtue of paragraph (a) of that subsection, or of there being payable to him a benefit under an enactment having effect in Great Britain and corresponding to a benefit mentioned in that paragraph; or
(ii) he qualified under subsection (2C) of that section or of section 129 of the Great Britain Contributions and Benefits Act,".

(9) This section, except subsection (3) above (and subsection (1) above so far as relating to that subsection), applies to claims made, or treated as made, on or after 1st October 2000.")

Dawn Primarolo: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to take Lords amendment No. 7.

Dawn Primarolo: The Chancellor announced in his Budget statement in March a new fast-track gateway to the disabled persons tax credit to help people who become disabled while in work. Since then, work on the details of the fast track has been under way, and the Government were pleased to introduce the new clause on Report in the other place. It was warmly welcomed there and I am sure that the House will welcome it also.
The new fast-track gateway introduced by clause 14 aims to make it financially possible for newly disabled people to stay in work even if, because of their disability, they either have to move to a less demanding—and therefore less well-paid—job, or need to reduce their working hours in their old job. The fast-track gateway will be an additional route to the disability tax credit for people who are in work and who cannot meet the present qualifying conditions.
From October 2000, a person will be able to apply for the disabled persons tax credit if he or she has received, for 140 days, statutory sick pay, short-term incapacity benefit paid at the lower rate, income support paid on grounds of incapacity, national insurance credits only or occupational sick pay—linked periods of incapacity will count as long as together they add up to 140 days; if he or she has a condition that puts him or her at a disadvantage in getting a job; if a medical practitioner certifies that the illness or disability will last for at least six months, or for the rest of the applicant's life if that is


likely to be shorter than six months; and if, on returning to work, the applicant will receive earnings at least 20 per cent. less than would have been the case if there had been no disability. People who have made a successful initial application for the disabled persons tax credit will, of course, be able to make a repeat application if the illness or disability continues at the end of the 26-week award period.
The idea of the fast-track gateway emerged from informal discussions between the Government and the disability lobby about the problems faced by people who become disabled while in work. As I have said, the Chancellor announced the fast track in outline in his pre-Budget report in November 1998. A formal consultation followed and the proposals were warmly welcomed by the disability lobby, whose suggestions for improvements have been reflected in the final design. In particular, the Disablement Income Group described the proposed fast-track gateway as a "very welcome development", and the Royal Association for Disability and Rehabilitation praised the emphasis that the Government are placing on enabling disabled people to remain in work.
For completeness, I should remind the House that, since it last debated the Tax Credits Bill, the Government have taken two further steps to address the needs of disabled people. We announced on 17 May that, from October 2000, the working families tax credit would include an additional premium for each disabled child in a family receiving the tax credit. That additional premium of £21.90 per week is already payable under the disability working allowance and will continue under the disabled persons tax credit. The extension to the working families tax credit means that extra help will be available to working families with a disabled child, whether or not one of the parents is also disabled. That will no doubt be extremely welcome news to the disability groups who have long campaigned for the disabled child of an able-bodied person to be treated as generously as the disabled child of a disabled parent. I hope that I have explained the details of the new clause to the House. We welcome these changes and support the Lords amendment.

Mr. Pickles: I shall be brief. It would be churlish not to thank the Paymaster General for giving a brief explanation of the changes. She will recall that this matter concerned all political parties in Committee, and we are pleased that the Government have honoured their undertakings. While we oppose this measure, we have done our best to try to improve it. There was always a thin red line between our co-operation and opposition. If the hon. Lady has been good will hunting, she has certainly found it in this amendment. We recognise that and support the amendment.
Lords amendment agreed to [Special Entry].
Lords amendments Nos. 5 to 11 agreed to.
Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill: Ms Hazel Blears, Mr. Greg Pope,

Mrs. Eleanor Laing, Mr. Eric Pickles and Dawn Primarolo; Three to be the quorum of the Committee.—
[Mrs. McGuire.]

To withdraw immediately.

Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

ACCESS TO JUSTICE BILL [Lords] [WAYS AND MEANS]

Resolved,
That, for the purposes of any Act resulting from the Access to Justice Bill [Lords], it is expedient to authorise—

(a) the imposition on professional bodies of requirements to make payments towards meeting the expenditure of the Legal Services Ombudsman and the Legal Services Complaints Commissioner, and
(b) the payment of sums into the Consolidated Fund.—[Mrs. McGuire.]

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Keith Vaz): Before moving to the formal business, may I take this opportunity to thank all members of the Standing Committee who considered the Bill. Members on both sides contributed to a thorough and useful examination of this important Bill. The House will note that many of the suggestions made in Committee have been taken forward in the amendments to be discussed this evening.
In particular, I thank the hon. and learned Member for Harborough (Mr. Garnier) and the hon. Member for Torridge and West Devon (Mr. Burnett). I note that the contribution of the hon. and learned Member for Harborough to our debate has resulted in his promotion to observer to the shadow Cabinet as the shadow Attorney-General. I am sure that the hon. and learned Gentleman will thank the Government for their part in his elevation.
As the House knows, my hon. Friend the Member for Ashfield (Mr. Hoon) was the Minister responsible for guiding the Bill through its earlier stages. I pay tribute to his skilful handling of the Bill and his determination to steer through a piece of legislation that will radically improve access to justice for all our citizens. My hon. Friend's handling of the Bill has brought him well-deserved promotion, as Minister of State, Foreign and Commonwealth Office.
My hon. Friend the Member for Hastings and Rye (Mr. Foster), who was also a member of the Standing Committee, has recently been promoted to become the Attorney-General's Parliamentary Private Secretary. The hon. Member for Surrey Heath (Mr. Hawkins) has received recognition in becoming the Opposition's spokesperson for the Lord Chancellor's Department.
The Access to Justice Bill is a landmark piece of legislation. It seeks to modernise justice so as to ensure that the law benefits all our citizens. However, I am not entirely certain that the Government anticipated that the Bill would achieve such success in supporting, enhancing and, indeed, modernising the careers of so many hon. Members who were involved in its parliamentary passage.
The Ways and Means resolution is necessary to authorise the Lord Chancellor to require the legal professional bodies to pay towards the expenditure of the Legal Services Commissioner and the legal services ombudsman; and to allow the commissioner to levy penalties on professional bodies. We will discuss the substance of our proposals later—

Mr. Deputy Speaker: Order. I do not want to hear again the preface to the Minister's speech on Third Reading. It seems slightly misplaced, attached to the Ways and Means resolution.

Access to Justice Bill [Lords]

As amended in the Standing Committee, considered.

New Clause 13

PRINCIPLES APPLICABLE TO PART I

'(1) Every person exercising functions in connection with this Part must act, so far as possible, in a way which is compatible with the objectives set out in subsection (2).
(2) The objectives are:

(a) that persons have access to legal services and the machinery of justice which they would otherwise be unable to obtain on account of their means;
(b) that such access is not to be impaired on account of racial grounds, gender, sexual orientation or disability (within the meaning of the Disability Discrimination Act 1995) or the place in England and Wales where any legal services are sought;
(c) that legal services and facilities of high quality be available such that disputes may be resolved, and proceedings determined, expeditiously, fairly and with the parties placed on an equal footing;
(d) that persons obtaining access to legal services under this part shall have the widest possible choice of provider or services.'.—[Mr. Garnier.]

Brought up, and read the First time.

Mr. Edward Garnier: I beg to move, That the clause be read a Second time.
I declare an interest to the House. I am a practising barrister. My name on the amendment paper has been marked [R], as have those of my hon. Friend the Member for Surrey Heath (Mr. Hawkins) and my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot).
I thank the Minister for his kind remarks. That will not be said again on Third Reading, Mr. Deputy Speaker. I do not ascribe the various promotions of my right hon. and hon. Friends to the reasons that the Minister cited, but one does not look askance at kind words from the Government, as they do not come often. I am grateful to my parliamentary neighbour for the kindness that he has just demonstrated.
While we are in that mood, may I briefly pay tribute to my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell), whose shadow office I now hold. He is the longest-serving Law Officer this century, and certainly the longest continuous serving Law Officer. He has given signal service to the House, the law and to the Attorney's chambers over 10 years, and he was in government two years before that in the Department of Social Security. He will be missed on the Front Bench, although his absence today is only temporary, and before long we shall hear much from him from the Back Benches. I congratulate my hon. Friend the Member for Surrey Heath on his promotion.
I hope to persuade the House that the purpose and intent of new clause 13 is entirely proper and to be welcomed. It was introduced in the other place by Lord Lloyd of Berwick, with cross-party support. It was not an Opposition ambush. The Bill was amended in the other place by new clause 1, as it was at that stage, introduced by a retired Law Lord, a man of great wisdom and humanity. The new clause received all-party support because it was a good thing.
The Lord Chancellor demonstrated unusual hastiness and churlishness, which we do not often see from that august person, when he described Lord Lloyd's new clause as a gimmick. That was unfortunate and wrong. No intelligent person would have used such language, had he thought about the matter carefully.
That point is reinforced by the support that the new clause received in another place and in Committee, and which it has now, not only from lawyers, the Law Society, the Bar Council and me as an individual lawyer, but from the Child Poverty Action Group, the Institute of Legal Executives, the Law Centres Federation, Mencap, the Royal Association for Disability and Rehabilitation—RADAR, the Royal National Institute for the Blind, the Advice Services Alliance, the Consumers Association, Justice, the Legal Action Group, the National Association of Citizens Advice Bureaux, Refuge and the Royal National Institute for Deaf People. That is a cross-section of bodies and interest groups which represent a rather wider alliance than the somewhat party political groups that we find on the Opposition Benches.
7 pm
In Committee in early May, with the assistance of the new Minister, who played a silent role, the Government removed the clause. New clause 13 is slightly different from the clause in the Bill when it left the other place in that it widens the anti-discrimination provisions and provides access to the widest possible choice of provider or services.
There are four fundamental objectives by which to test access to justice—quality, access, choice and funding. New clause 13 is intended to make access to legal services and justice available to those who would otherwise be unable to obtain it on account of their means. That should be a fundamental principle to avoid the possibility that access to justice is available only to the rich.
The provisions for anti-discrimination should, in themselves, be unexceptionable. The purpose is to make that plain in the Bill, so that those who may otherwise face barriers to obtaining access to justice do not find their access impaired.
The Government appear, and they appeared on the previous two occasions on which the matter was debated, to object to the clause, both in terms of the principle of whether there should be such a clause at all and in terms of its individual provisions. Placing the parties on an equal footing appeared to the Government to mean that there was no proportionality or limit to the amount of costs. However, what is intended is a clear statement of principle, which is designed to govern part I of the Bill.
The rules of court already provide mechanisms to ensure that costs are reasonable and proportionate. The issue of principle is to ensure that there is equality of arms between parties to a dispute within the constraints of court management of cases. That does not mean that state-funded lawyers have to be paid the same rate of fees that privately funded lawyers are paid or can attract. It simply means that state-funded lawyers should be able to command fees that attract lawyers of quality to take up a case on behalf of the poor, disabled, elderly or disadvantaged.
On choice of provider, there may be restrictions on grounds of quality. However, where a provider of services can demonstrate quality and is prepared to work for the fees that the Government allow, there is no clear reason why access to justice should be arbitrarily limited by the Government. Although assurances have been given in some areas of work for the first round of any contracting scheme, those have not yet been extended. The network of services provided by local solicitors is a major asset to their communities. The new clause seeks to ensure the widest possible choice of provider and services. That would include representation not just in court, but in alternative methods of dispute resolution.
I do not need to take the House through new clause 13. It appears on the amendment paper for all to see and I trust that many will have read it before coming into the Chamber this evening. It is sensible, humane, civilised and does not undermine the Bill's overall purpose. It defies logic that any hon. Member should oppose its re-inclusion in the Bill.
The new clause had all-party support in the other place and was introduced by a majority of 71. Principles clauses are not foreign to our statute law. Yesterday, the House gave the Food Standards Bill its Second Reading; it has a principles clause. The Financial Services and Markets Bill, currently being debated in the House, has a purposes or objectives clause. Rule 1 of the brand new civil procedure rules, which came into force a couple of months ago, is an objectives rule—a principles rule—setting out precisely what is intended to happen as a consequence of the introduction of those rules.
I look forward to hearing from the Minister why, in all conscience, he, as a Labour Member, has the nerve, the gall and the indecency, to oppose new clause 13.

Mr. Charles Wardle: I congratulate the hon. Member for Leicester, East (Mr. Vaz) on his appointment as Parliamentary Secretary, Lord Chancellor's Department. We have sparred cheerfully on other matters in the past, and it is good to see him on the Treasury Bench.
My hon. and learned Friend the Member for Harborough (Mr. Garnier) has already reminded the House that an objectives clause seeking to define the Bill's basic purpose was introduced in another place but removed in Committee. It placed clients receiving legal aid on an equal footing with clients who could afford to pay for themselves. The Government, and particularly the Lord Chancellor, have been dismissive of the need for such a clause, as we heard from my hon. and learned Friend the Member for Harborough. But their dogmatic attitude means that an important opportunity to reform legal aid in a way that puts all clients on the same basis will have been squandered. As long as legal aid is a matter for the discretion of Legal Aid Board administrators rather than a question of basic entitlement, one law for the rich and one law for the poor will continue to be the norm.
I support new clause 13 because it would put back into the Bill that clear statement of objectives which an impressive coalition of their lordships, including Law Lords, introduced, but which, as we know, the Government have since removed.
To illustrate the reasons why I support new clause 13, I wish to draw to the attention of the House Lord Spens's action against the Bank of England, which recently came to an abrupt halt because legal aid was suddenly and inexplicably withdrawn on the eve of the trial.
I understand that many may associate an hereditary peerage, such as Lord Spens enjoys, with substantial wealth and financial security. That is not always so. It certainly has not applied to Lord Spens for more than a decade. He was a successful and highly paid merchant banker until the mid-1980s when he was arrested over the Guinness affair and put on trial in what became known as Guinness II. In the process of his defending himself, his wealth was soon exhausted.
On 4 June 1997, I spoke in the House about the unfairness of the inquisitorial nature of Department of Trade and Industry inspectors' inquiries, and I alluded to the Guinness case at some length. The interests that I declared in that debate apply here.
On that ocasion, I told the House that Lord Spens had been sacked from his merchant banking job because politicians and officials at the DTI and the Treasury were pressing the Bank of England to collect some well-known scalps. At a meeting with Rosalind Wright, who has since risen to the post of director of the Serious Fraud Office, another official, John Wood, said:
We don't want rows and rows of defendants. We are looking for major offenders as understood by the media.
The then Chancellor told the House that the Government would be taking action over the Guinness affair. His private secretary, now the permanent under-secretary at the Welsh Office, communicated with the Bank of England and the following day the Bank told the merchant bank to sack Spens or it would lose its banking licence. Spens was run out of the City and made unemployable. The Guinness II trial collapsed when Spens was about to produce evidence of the interference that I have just described. He was acquitted and awarded his full costs of £2 million, the first £500,000 of which he had raised privately, with the balance coming from legal aid.
It was common knowledge in the City and in Whitehall that, during a period of six days in January 1987, Bank of England officials had exceeded their powers, making ill-judged and indiscreet demands, because, to use the words of a Minister at the time, the Government "wanted handcuffs put on" ahead of the forthcoming general election.
Unable to work at his corporate finance trade, and dependent on legal aid, Spens fought on, despite two heart bypass operations. Advised by his solicitors, Russell Jones and Walker, he began proceedings against the Bank of England for unfair dismissal. He engaged Lord Neill of Bladen as his leading counsel. Lord Neill, who succeeded Lord Nolan as chairman of the Committee on Standards in Public Life, assured Spens—

Mr. Mark Todd: On a point of order, Mr. Deputy Speaker. May I question the relevance of this to the matter under debate?

Mr. Deputy Speaker (Sir Alan Haselhurst): I am certainly hoping that the hon. Member for Bexhill and Battle (Mr. Wardle) can make that very clear very soon.

Mr. Wardle: I hope to do so and, as I have said, I shall not detain the House for long, but this matter concerns legal aid and the importance of having a principle enshrined in the Bill that will ensure that legal redress is available to people regardless of their means.
Lord Neill said that he abhorred the abuse of power and predicted a successful outcome. The Bank's attempt to strike out the case failed. Only weeks before the trial, however, Lord Neill was pressed by another member of the Committee on Standards in Public Life to drop Spens's case, on the grounds that he could not reasonably devote so much time to his own legal work and chair the Committee at the same time. Lord Neill saw nothing untoward or ironic about that intervention; he said that he would continue as legal counsel—this is relevant to legal aid—but recommended the engagement of a second counsel to make most of the running, and Russell Jones and Walker made an application for extra legal aid to cover that.
John Baker, the Legal Aid Board executive who had handled the case for several years, was replaced by David Williams three weeks later, and eight weeks after that, Williams served a show-cause notice on Russell Jones and Walker, placing an embargo on the legal aid certificate against which Lord Neill and Russell Jones and Walker successfully appealed. The same process was repeated in the following month and, at the end of that appeal hearing, the chairman stated that the decision had been taken to reinstate the certificate of legal aid to—

Mr. Deputy Speaker: Order. I am increasingly unhappy about the trend of the hon. Gentleman's speech. It strikes me that it would be much more appropriate to raise the specific case in an Adjournment debate, or at some other opportunity, rather than tying it, by a very thin line indeed, to the new clause. I must advise him that, if he cannot bring his remarks back within the terms and meaning of the new clause, he should desist.

Mr. Wardle: I always respect your guidance, Mr. Deputy Speaker, and, although I feel strongly that there is no more vivid illustration than this of what can go wrong with legal aid and why the new clause should be added to the Bill, I shall conclude my remarks. The unhappy experience of Lord Spens leaves the words spoken about the Bill by the Lord Chancellor on the "Today" programme sounding rather hollow. He said:
The highest priority will be accorded to cases in which people allege abuse of power by authority.
That is precisely what I was hoping to illustrate to the House by referring to the Spens case; it underlines the urgent necessity to enshrine in the Bill the fundamental principle set out in the new clause: people should have access to legal services and the machinery of justice, which they would otherwise be unable to obtain because of their lack of means. That is what the case and the experience of Lord Spens are all about.

Mr. John Burnett: This is the first opportunity I have had on the Floor of the House to congratulate not only the Minister, but the hon. Member for Surrey Heath (Mr. Hawkins) and the hon. and learned Member for Harborough (Mr. Garnier) on their respective promotions. I hope that, with a new Minister, we will have a new wind, if that is the right expression, and a bit more fresh thinking on this important Bill.
I support new clause 13, which is important. I remind the House that, in the White Paper "Modernising Justice", the Lord Chancellor set out in his foreword and in chapter 1 his aims and objectives for the Bill. He asserted:
It is not enough for people to have rights; they must be confident they can enforce those rights if need be.
He went on:
The justice system should serve everyone, regardless of their means.
He also said:
The disadvantaged and the socially excluded will find help with the issues that affect their everyday lives at the heart of the new service.
The Government's twin aims are to achieve a significant increase in access to justice and to obtain the best value for taxpayers' money spent on legal services and in the courts.
Effectively, new clause 13 embodies the Lord Chancellor's aspirations for the Bill. We discussed a similar measure in Committee, but the Government objected that there was no proportionality or limit on costs. The new clause is a statement of principle embodying the Lord Chancellor's own principles for the Bill and it is proportionate in so far as it is qualified, in subsection (1), by the words "so far as possible". The proposal does not invite open-ended expenditure but highlights the important principles stated by the Lord Chancellor himself—quality, access, choice and fair funding.
7.15 pm
On quality, the Liberal Democrats have strongly supported the establishment of panels of solicitors with expertise. On 27 January, we debated in Committee the draft Legal Aid (Prescribed Panels) Regulations 1998, which set up a clinical negligence panel within the Law Society. We supported that, and the setting up of other expert panels, because we believe that such expertise is in the public interest and in the interests of those who use the legal system. They will also provide better value for money; indeed, they will save money. The legal professions have rightly become more specialist, and it is not in the interests of clients or of the state to pay for lawyers learning on the job.
Nevertheless, this objectives new clause will act as vital spur to those administering the Legal Services Commission, which will ensure quality, access, choice and fair funding. That is particularly important in rural towns and rural areas. During the first sitting of the Committee, on 27 April 1999, I intervened on the then Minister and asked whether firms should automatically be entitled to a contract if they achieved the quality standards. The hon. Gentleman ended his response by saying that the Government were looking for the most effective way in which to ensure that there was access to justice throughout the country which will guarantee—I emphasise that word—that those who seek advice receive it from those who are best qualified to do the work. That is the essence of the new clause. It is vital that there should be availability and choice in all geographical areas, including the sparsely populated rural areas. The new

clause would go some way towards ensuring real access to justice and living up to the aims and objectives for the Bill set by the Lord Chancellor.

Mr. Vaz: I thank the hon. and learned Member for Harborough (Mr. Garnier) and the hon. Member for Torridge and West Devon (Mr. Burnett) for their kind comments and I associate myself with what was said about the right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell), who served with great distinction as a Law Officer.
As the hon. and learned Member for Harborough said, new clause 13 is similar to a clause that was added to the Bill by the other place and deleted in Standing Committee. The original clause was pressed to a vote in the other place, although the Government were proposing their own amendments to set out more clearly the separate purposes of the community legal service and the criminal defence service. Those two purpose clauses are now clauses 4(1) and 12(1) respectively—they are already in the Bill.
The purpose of the CDS is to provide the advice, assistance and representation that suspects and defendants require in the interests of justice. That is very clear, and the same absolute entitlement that exists now is retained. Briefly, the purpose of the CLS is to secure appropriate legal services, but not only lawyers' services, to meet people's needs effectively, subject to the constraint of available resources and according to priorities.
The Government have always made it clear that we are sympathetic to many of the concerns underlying this so-called principles new clause. That is why, when we sought to remove the previous version in Standing Committee, we tabled our own amendments to add three specific objectives for the CLS. These measures are in clause 4(4) and include objectives on quality and access—two of the points mentioned by the hon. and learned Member for Harborough—and the swift and fair resolution of disputes.
I find it hard to see what more is needed and, after so many debates on the issue, I am a little disappointed that the proponents of a separate principles new clause have tabled one again. None the less, I welcome the opportunity to explain in more detail to the whole House why the new clause, although mostly laudable in aspiration, is unnecessary and in parts unacceptable.
Our first objection is that, by seeking to cover two separate schemes with a single set of objectives, a principles clause overarching the whole of part I would undermine the structure of the Bill, which makes a clear distinction between the community legal service and the criminal defence service. This reflects the different policy objectives behind the public funding of legal services in civil and in criminal cases, the different mix of services required—criminal legal aid is, for example, far more court-centred—and the very different factors driving demand and cost.
Moreover, like its predecessor, new clause 13 expresses some unrealistic aspirations. Subsection (2)(a) states that persons should have access to services
which they would otherwise be unable to obtain on account of their means".
However, there is no mention of any test of merits or priorities, or any indication that the services provided should be appropriate and proportionate to the problems


that they address. Nor is there any hint that people can obtain legal services other than with their own or the taxpayer's money. No doubt that is because legal expenses insurance and conditional fees did not exist in 1949, when this particular formulation was first used.
Subsection (2)(b) is intended to ensure that access to services is not impaired by discrimination on grounds of race, sex or disability. The Government fully share that objective, but, having considered the matter carefully, we have concluded that nothing can usefully be added to the Bill. The Legal Services Commission and those whom it engages to provide services are already subject, as employers and service providers, to the provisions of the sex, race and disability discrimination Acts. Moreover, as a public body the commission will be covered by the Human Rights Act 1998, which outlaws discrimination on a wide range of grounds in relation to people's access to their rights under the convention.
We are determined to ensure that the reformed legal aid system delivers help to those who need it, irrespective of their race, sex or disability. That is why we need flexible machinery that can respond to the changing needs and priorities of the community.
Under the Bill, for the first time in legal history we shall be able to address the particular needs of any parts of the community—the needs of the disabled, or the needs of people with an ethnic minority background. Clause 6(5) refers to "areas or communities" specifically so that the commission can target non-geographical communities. The Legal Aid Board has directed its regional legal services committees that their strategies for assessing the needs and priorities of their communities should discuss the needs of specific client groups such as ethnic minorities, the disabled, the elderly, carers and remote communities. The board's franchise standard makes it mandatory for firms to have a written equal opportunities policy that is in effective operation. The policy must make it clear that the firm will not discriminate on grounds of race, gender, religion, disability or sexual orientation.
Only last week, the Lord Chancellor instructed the board to report to him by September on its proposals for monitoring the ethnic origin and gender both of the clients receiving services under its contracts and of the providers supplying those services. He said that he intended in due course to direct the Legal Services Commission to take over those monitoring systems, and to include information about the impact of the reform on minority groups in its annual report. The Lord Chancellor also asked the board to report to him, by the end of this year, the options for monitoring the impact of reform on access for the disabled.
As the hon. and learned Member for Harborough pointed out, subsection (2)(b) of new clause 13 also deals with geographic access generally. It states that access should not be impaired on account of the place in England and Wales where legal services are sought. I have two difficulties with that formulation. First, the emphasis is entirely on physical location. There is not even any recognition that much can be done perfectly well on the telephone. There is no hint of the larger role that information technology could play in future, and no suggestion that a lawyer should ever be troubled to leave his office to visit a client. Secondly, the subsection implies that people who live in rural areas can enjoy the same degree of geographic access as people who live in large cities. That is obviously unachievable.
The Government have sought to address legitimate concerns about access in clause 4(4)(a), which establishes the objective of promoting improvements in the range and quality of services and in the ways in which they are made accessible to people. We are committed to providing effective access through the community legal service, but without limiting the concept of access to the number and location of lawyers' offices. The ability to tailor contracts to specific circumstances will make it possible to address areas in which access is inadequate now.

Mr. Dominic Grieve: I welcome the Minister to his post, but let me take him back a few sentences. Surely a moment's thought would lead him to acknowledge that his argument that the new clause fails to reflect people's ability to obtain legal services on the telephone is nonsense. The new clause clearly does not preclude the person exercising the function from taking that into account. Nothing in the new clause suggests that it concerns the precise geographical location of services; it merely states that that should be taken into account. Surely the Minister must accept that this is a very weak part of his argument.

Mr. Vaz: No, I do not accept that. I believe that the drafting of new clause 13 means, in effect, that physical location will have to be taken into consideration, which will have exactly the effect that I have described.
Subsection (2)(c) covers quality, speed and fairness. The Government share those objectives, and have already dealt with them in clause 4(4). To that extent, the new subsection is wholly unnecessary. Subsection (2)(c) also refers to placing the parties on an "equal footing"—I shall deal shortly with what was said by the hon. Member for Bexhill and Battle (Mr. Wardle)—but the danger of those apparently admirable words is that they might compel the commission to match the spending of a wealthy private party, regardless of the importance or complexity of the case.
Subsection (2)(d) states that people obtaining legal services should have
the widest possible choice of provider or services".
That goes much too far. As the Opposition know from their experience in government, the task is to balance competing desirable objectives, of which choice may be only one. An overriding objective of providing the widest possible choice would trump consideration of quality or value for money—a point made in the White Paper published by the last Government. It is almost always desirable for an accused person to have a choice—but not necessarily an unlimited choice—of legal representative, as that helps to promote confidence in that person's lawyer and the criminal justice system. Clause 15 already secures that objective.
In the case of civil litigation, which most people fortunately experience only once in a lifetime, I am not sure that it is particularly helpful to single out the choice of provider as such, as opposed to, for example, access; and it is positively undesirable to have as an objective the widest possible choice of services when the aim of the community legal service is to provide the most appropriate means of dealing with a particular problem.
The hon. Member for Bexhill and Battle mentioned Lord Spens. I must tell him—he knows that I am going to say this—that this is a matter for the Legal Aid Board:


it is not possible for Ministers to comment on individual cases. As the hon. Gentleman will know, it is possible for people to make representations, and Lord Spens has done so. I think that Lord Spens has done pretty well out of the legal aid fund, but I must tell the hon. Gentleman that, if he raises the matter on the Adjournment, the debate will be pretty short because I shall not be able to comment on the specific circumstances of the case.
The Government firmly believe that the Bill already meets the legitimate concerns that underlie new clause 13, and that the new clause would merely add confusion and create unrealistic expectations. I therefore invite the House to reject it.

Mr. Grieve: I had not intended to speak on new clause 13, as I had already spoken in Committee about a similar clause at the time the Government deleted it. However, I could not fail to respond to the Minister's comments, some of which struck me as extraordinary.
For example—I shall put this as nicely as possible—the Minister rubbished the suggestion that there was any need for a provision ensuring that access would not be impaired on account of
the place in England and Wales where any legal services are sought".
Of course I acknowledge that one of the matters that would have to be taken into consideration by any person exercising functions is the fact that, with modern communications, access to legal services may be possible even in an area where there are no franchise solicitors dealing with particular matters. Nevertheless, the fact remains that the geographical location of a person seeking legal services in relation to where those services are available will be a relevant matter. The matter greatly exercised the Committee because of anxieties that such legal services would not be available in future.
7.30 pm
It strikes me as very odd that we have a Government who, largely with my support, have been prepared to entrust to the United Kingdom judiciary the task of interpreting human rights—notwithstanding the fact that that may require, when the Government choose finally to implement the Human Rights Act 1998, occasionally casting aspersions on ministerial decisions—but who are totally reluctant to accept an aims clause in the Bill because of a deadly fear that, were they to do so, a time would come when, in a judicial review, there would be a challenge to the fact that some of the aims were incompatible with the way in which the Bill's provisions were working, excluding people from access to justice. That was why the aims clause was so important when it was moved in the other place by people who were well versed in how the system worked, and why it had so much to commend it.
As much as I welcome the Minister to his new post, I very much regret that today the matter should have been dealt with glibly. The Government should have the courage of their convictions. If Ministers believe, as I am perfectly prepared to acknowledge they do, that the Access to Justice Bill will facilitate access to justice, which is what the Minister has been telling us repeatedly, they should have nothing to fear from the aims clause,

with which the Act should be fully compatible. It fills me with foreboding to see the Government's reluctance to accept the new clause if the Bill will, in fact, do what the Government say it will.

Mr. Garnier: I have listened with care to what the Minister has said, but I am afraid that I and my right hon. and hon. Friends are not in the least bit convinced by it. I think that the hon. Member for Torridge and West Devon (Mr. Burnett), too, would agree with me that nothing that has fallen from the Minister's lips answers the questions at all. I therefore invite the House to support the re-inclusion of the provisions of new clause 13 in the Bill.

Question put, That the clause be read a Second time:—

The House divided: Ayes 146, Noes 313.

Division No. 215]
[7.32 pm


AYES


Allan, Richard
Gorman, Mrs Teresa


Ancram, Rt Hon Michael
Gray, James


Arbuthnot, Rt Hon James
Green, Damian


Baldry, Tony
Greenway, John


Beggs, Roy
Grieve, Dominic


Bercow, John
Hamilton, Rt Hon Sir Archie


Beresford, Sir Paul
Hammond, Philip


Blunt, Crispin
Harris, Dr Evan


Body, Sir Richard
Hawkins, Nick


Boswell, Tim
Hayes, John


Bottomley, Rt Hon Mrs Virginia
Heald, Oliver


Brady, Graham
Heath, David (Somerton & Frome)


Brazier, Julian
Hogg, Rt Hon Douglas


Breed, Colin
Howard, Rt Hon Michael


Brooke, Rt Hon Peter
Howarth, Gerald (Aldershot)


Browning, Mrs Angela
Hunter, Andrew


Bruce, Ian (S Dorset)
Jack, Rt Hon Michael


Burnett, John
Jenkin, Bernard


Burns, Simon
Johnson Smith, Rt Hon Sir Geoffrey


Burstow, Paul



Butterfill, John
Key, Robert


Campbell, Rt Hon Menies (NE Fife)
King, Rt Hon Tom (Bridgwater)



Kirkbride, Miss Julie


Chope, Christopher
Kirkwood, Archy


Clappison, James
Laing, Mrs Eleanor


Clark, Dr Michael (Rayleigh)
Lansley, Andrew


Clarke, Rt Hon Kenneth (Rushcliffe)
Leigh, Edward



Letwin, Oliver


Clifton-Brown, Geoffrey
Lewis, Dr Julian (New Forest E)


Collins, Tim
Lidington, David


Cormack, Sir Patrick
Livsey, Richard


Cran, James
Lloyd, Rt Hon Sir Peter (Fareham)


Curry, Rt Hon David
Loughton, Tim


Dafis, Cynog
Luff, Peter


Davey, Edward (Kingston)
MacKay, Rt Hon Andrew


Davies, Quentin (Grantham)
Maclean, Rt Hon David


Davis, Rt Hon David (Haltemprice)
McLoughlin, Patrick


Duncan, Alan
Madel, Sir David


Duncan Smith, Iain
Major, Rt Hon John


Emery, Rt Hon Sir Peter
Malins, Humfrey


Fabricant, Michael
Maples, John


Fallon, Michael
Mates, Michael


Fearn, Ronnie
Mawhinney, Rt Hon Sir Brian


Flight, Howard
Moore, Michael


Forth, Rt Hon Eric
Moss, Malcolm


Fox, Dr Liam
Öpik, Lembit


Fraser, Christopher
Ottaway, Richard


Gale, Roger
Page, Richard


Garnier, Edward
Paice, James


George, Andrew (St Ives)
Paterson, Owen


Gibb, Nick
Pickles, Eric


Gill, Christopher
Prior, David


Gillan, Mrs Cheryl
Redwood, Rt Hon John






Robathan, Andrew
Taylor, Sir Teddy


Robertson, Laurence (Tewk'b'ry)
Thompson, William


Roe, Mrs Marion (Broxbourne)
Tonge, Dr Jenny


Ross, William (E Lond'y)
Tredinnick, David


Ruffley, David
Trend, Michael


Russell, Bob (Colchester)
Tyler, Paul


St Aubyn, Nick
Viggers, Peter


Sanders, Adrian
Walter, Robert


Sayeed, Jonathan
Waterson, Nigel


Shephard, Rt Hon Mrs Gillian
Webb, Steve


Simpson, Keith (Mid-Norfolk)
Wells, Bowen


Smith, Sir Robert (W Ab'd'ns)
Whitney, Sir Raymond


Smyth, Rev Martin (Belfast S)
Whittingdale, John


Spring, Richard
Widdecombe, Rt Hon Miss Ann


Stanley, Rt Hon Sir John
Willetts, David


Steen, Anthony
Willis, Phil


Streeter, Gary
Winterton, Mrs Ann (Congleton)


Swayne, Desmond
Winterton, Nicholas (Macclesfield)


Syms, Robert
Woodward, Shaun


Tapsell, Sir Peter
Young, Rt Hon Sir George


Taylor, Ian (Esher & Walton)
Tellers for the Ayes:


Taylor, John M (Solihull)
Mr. Stephen Day and


Taylor, Matthew (Truro)
Mrs. Jacqui Lait.




NOES


Abbott, Ms Diane
Clark, Paul (Gillingham)


Adams, Mrs Irene (Paisley N)
Clarke, Rt Hon Tom (Coatbridge)


Ainger, Nick
Clarke, Tony (Northampton S)


Alexander, Douglas
Clelland, David


Allen, Graham
Clwyd, Ann


Anderson, Donald (Swansea E)
Coaker, Vernon


Armstrong, Rt Hon Ms Hilary
Coffey, Ms Ann


Ashton, Joe
Cohen, Harry


Atkins, Charlotte
Coleman, Iain


Austin, John
Colman, Tony


Banks, Tony
Connarty, Michael


Barnes, Harry
Cook, Frank (Stockton N)


Barron, Kevin
Corbett, Robin


Bayley, Hugh
Corbyn, Jeremy


Beard, Nigel
Corston, Ms Jean


Beckett, Rt Hon Mrs Margaret
Cousins, Jim


Begg, Miss Anne
Cranston, Ross


Benn, Hilary (Leeds C)
Crausby, David


Benton, Joe
Cryer, John (Hornchurch)


Betts, Clive
Cummings, John


Blackman, Liz
Cunningham, Jim (Cov'try S)


Blears, Ms Hazel
Dalyell, Tam


Blunkett, Rt Hon David
Darling, Rt Hon Alistair


Boateng, Paul
Darvill, Keith


Borrow, David
Davey, Valerie (Bristol W)


Bradley, Keith (Withington)
Davidson, Ian


Bradley, Peter (The Wrekin)
Davies, Rt Hon Denzil (Llanelli)


Bradshaw, Ben
Dawson, Hilton


Brinton, Mrs Helen
Dean, Mrs Janet


Brown, Rt Hon Gordon (Dumfries)
Denham, John



Dismore, Andrew


Brown, Russell (Dumfries)
Dobbin, Jim


Browne, Desmond
Donohoe, Brian H


Buck, Ms Karen
Doran, Frank


Burden, Richard
Drew, David


Burgon, Colin
Drown, Ms Julia


Caborn, Rt Hon Richard
Dunwoody, Mrs Gwyneth


Campbell, Alan (Tynemouth)
Eagle, Angela (Wallasey)


Campbell, Mrs Anne (C'bridge)
Eagle, Maria (L'pool Garston)


Campbell, Ronnie (Blyth V)
Edwards, Huw


Campbell-Savours, Dale
Efford, Clive


Cann, Jamie
Ennis, Jeff


Casale, Roger
Fisher, Mark


Cawsey, Ian
Fitzsimons, Lorna


Chapman, Ben (Wirral S)
Flint, Caroline


Chaytor, David
Follett, Barbara


Clapham, Michael
Foster, Michael Jabez (Hastings)


Clark, Rt Hon Dr David (S Shields)
Foster, Michael J (Worcester)


Clark, Dr Lynda (Edinburgh Pentlands)
Foulkes, George




Galloway, George





Gapes, Mike
Liddell, Rt Hon Mrs Helen


Gardiner, Barry
Livingstone, Ken


George, Bruce (Walsall S)
Lloyd, Tony (Manchester C)


Gerrard, Neil
Lock, David


Gibson, Dr Ian
Love, Andrew


Gilroy, Mrs Linda
McAvoy, Thomas


Godman, Dr Norman A
McCabe, Steve


Godsiff, Roger
McCartney, Rt Hon Ian (Makerfield)


Goggins, Paul



Golding, Mrs Llin
McDonagh, Siobhain


Gordon, Mrs Eileen
Macdonald, Calum


Griffiths, Jane (Reading E)
McDonnell, John


Griffiths, Nigel (Edinburgh S)
McGuire, Mrs Anne


Griffiths, Win (Bridgend)
McIsaac, Shona


Grocott, Bruce
McKenna, Mrs Rosemary


Grogan, John
McNulty, Tony


Gunnell, John
Mactaggart, Fiona


Hall, Patrick (Bedford)
McWalter, Tony


Hamilton, Fabian (Leeds NE)
McWilliam, John


Hanson, David
Mahon, Mrs Alice


Harman, Rt Hon Ms Harriet
Mallaber, Judy


Healey, John
Marsden, Paul (Shrewsbury)


Henderson, Ivan (Harwich)
Marshall, David (Shettleston)



Hepburn, Stephen
Marshall, Jim (Leicester S)


Heppell, John
Marshall-Andrews, Robert


Hesford, Stephen
Martlew, Eric


Hewitt, Ms Patricia
Maxton, John


Hill, Keith
Meale, Alan


Hinchliffe, David
Merron, Gillian


Hodge, Ms Margaret
Michie, Bill (Shef'ld Heeley)


Hood, Jimmy
Milburn, Rt Hon Alan


Hoon, Geoffrey
Miller, Andrew


Hope, Phil
Mitchell, Austin


Hopkins, Kelvin
Moonie, Dr Lewis


Howarth, George (Knowsley N)
Moran, Ms Margaret


Howells, Dr Kim
Morgan, Ms Julie (Cardiff N)


Hoyle, Lindsay
Morley, Elliot


Hughes, Ms Beverley (Stretford)
Mountford, Kali


Humble, Mrs Joan
Mudie, George


Hurst, Alan
Mullin, Chris


Hutton, John
Murphy, Denis (Wansbeck)


Iddon, Dr Brian
Murphy, Jim (Eastwood)


Illsley, Eric
Naysmith, Dr Doug


Jackson, Ms Glenda (Hampstead)
Norris, Dan


Jackson, Helen (Hillsborough)
O'Brien, Bill (Normanton)


Jamieson, David
O'Brien, Mike (N Warks)


Jenkins, Brian
Olner, Bill


Johnson, Alan (Hull W & Hessle)
Organ, Mrs Diana


Johnson, Miss Melanie (Welwyn Hatfield)
Osborne, Ms Sandra



Palmer, Dr Nick


Jones, Barry (Alyn & Deeside)
Pearson, Ian


Jones, Mrs Fiona (Newark)
Pendry, Tom


Jones, Helen (Warrington N)
Pickthall, Colin


Jones, Jon Owen (Cardiff C)
Pike, Peter L


Jones, Dr Lynne (Selly Oak)
Plaskitt, James


Jones, Martyn (Clwyd S)
Pollard, Kerry


Jowell, Rt Hon Ms Tessa
Pope, Greg


Keeble, Ms Sally
Pound, Stephen


Keen, Alan (Feltham & Heston)
Powell, Sir Raymond


Keen, Ann (Brentford & Isleworth)
Prentice, Ms Bridget (Lewisham E)


Kelly, Ms Ruth
Prentice, Gordon (Pendle)


Kemp, Fraser
Prescott, Rt Hon John


Kennedy, Jane (Wavertree)
Primarolo, Dawn


Khabra, Piara S
Purchase, Ken


Kidney, David
Quinn, Lawrie


Kilfoyle, Peter
Radice, Giles


King, Andy (Rugby & Kenilworth)
Rammell, Bill


King, Ms Oona (Bethnal Green)
Raynsford, Nick


Kumar, Dr Ashok
Reed, Andrew (Loughborough)


Ladyman, Dr Stephen
Reid, Rt Hon Dr John (Hamilton N)


Lawrence, Ms Jackie
Robinson, Geoffrey (Cov'try NW)


Lepper, David
Roche, Mrs Barbara


Leslie, Christopher
Rooker, Jeff


Levitt, Tom
Ross, Ernie (Dundee W)


Lewis, Ivan (Bury S)
Rowlands, Ted


Lewis, Terry (Worsley)
Roy, Frank






Ruane, Chris
Taylor, Ms Dari (Stockton S)


Ruddock, Joan
Thomas, Gareth (Clwyd W)


Russell, Ms Christine (Chester)
Thomas, Gareth R (Harrow W)


Ryan, Ms Joan
Timms, Stephen


Salter, Martin
Tipping, Paddy


Sarwar, Mohammad
Todd, Mark


Savidge, Malcolm
Touhig, Don


Sawford, Phil
Trickett, Jon


Sedgemore, Brian
Turner, Dennis (Wolverh'ton SE)


Sheerman, Barry
Turner, Dr Desmond (Kemptown)


Sheldon, Rt Hon Robert
Twigg, Derek (Halton)


Short, Rt Hon Clare
Twigg, Stephen (Enfield)


Simpson, Alan (Nottingham S)
Vaz, Keith


Singh, Marsha
Walley, Ms Joan


Skinner, Dennis
Ward, Ms Claire


Smith, Angela (Basildon)
Wareing, Robert N


Smith, Rt Hon Chris (Islington S)
Watts, David


Smith, Jacqui (Redditch)
White, Brian


Smith, John (Glamorgan)
Wicks, Malcolm


Smith, Llew (Blaenau Gwent)
Williams, Rt Hon Alan (Swansea W)


Snape, Peter



Soley, Clive
Williams, Alan W (E Carmarthen)


Squire, Ms Rachel
Wills, Michael


Starkey, Dr Phyllis
Winnick, David


Steinberg, Gerry
Winterton, Ms Rosie (Doncaster C)


Stewart, David (Inverness E)
Wise, Audrey


Stewart, Ian (Eccles)
Wood, Mike


Stinchcombe, Paul
Woolas, Phil


Stoate, Dr Howard
Worthington, Tony


Strang, Rt Hon Dr Gavin
Wright, Anthony D (Gt Yarmouth)


Straw, Rt Hon Jack
Wright, Dr Tony (Cannock)


Stringer, Graham
Wyatt, Derek


Stuart, Ms Gisela
Tellers for the Noes:



Taylor, Rt Hon Mrs Ann (Dewsbury)
Mr. Mike Hall and



Mr. Jim Dowd.

Question accordingly negatived.

Clause 4

THE COMMUNITY LEGAL SERVICE

Mr. Vaz: I beg to move amendment No. 87, in page 4, line 26, at end insert—

'(8A) The Commission may charge—
(a)for accreditation,
(b)for monitoring the services provided by accredited persons and bodies, and
(c)for authorising accreditation by others:
and persons or bodies authorised to accredit may charge for accreditation, and for such monitoring, in accordance with the terms of their authorisation.'.

Mr. Deputy Speaker (Mr. Michael Lord): With this it will be convenient to discuss Government amendments Nos. 88 to 90.

Mr. Vaz: The purpose of the amendments is to confer on the Legal Services Commission a power to charge for the accreditation and monitoring of providers of legal services and for authorising others to accredit and monitor providers of legal services. The amendments will also allow others who are authorised to accredit and monitor providers of legal services to charge for accreditation and monitoring, in accordance with terms set by the commission.
The Lord Chancellor will have power to require the commission to discharge its powers to charge for accreditation, monitoring and authorisation and to authorise others to charge in a prescribed manner. That would be by order, subject to negative resolution.
It is not intended that the commission will exercise its power to charge for accreditation and monitoring in respect of providers of legal services funded by the commission. Providers of services as part of the wider community legal service, funded by other bodies such as local authorities, may need to meet quality standards to secure their funding. In addition, those providing privately funded legal services may also wish to take advantage of the opportunity to obtain accreditation to demonstrate the quality of the services that they provide.
We believe that it would be wrong to expect the taxpayer to meet the costs of accrediting and monitoring those individuals and bodies who seek accreditation as a means of attracting private business. The power for the commission to charge for those services will ensure that the consumer will have the advantage of assurance of the quality of service without the taxpayer having to foot the bill. The commission will not seek to profit from that power, but simply to recover its costs of providing the service.

Amendment agreed to.

Amendment made: No. 88, in page 4, line 28, leave out '(8)' and insert '(8A)'.—[Mr. Vaz.]

Clause 5

FUNDING OF SERVICES

Amendment made: No. 11, in page 4, line 43, at end insert—
'() The Lord Chancellor shall lay before each House of Parliament a copy of every determination under subsection (2)(a).'.—[Mr. Vaz.]

Clause 11

COSTS IN FUNDED CASES

The Solicitor?General (Mr. Ross Cranston): I beg to move amendment No. 12, in page 9, line 32, leave out
'cases in which services have been'
and insert
'relation to proceedings in which services are'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 13 to 16 and 21.

The Solicitor-General: This group of drafting amendments is consequential to an amendment made in Committee to what is now clause 11(1). Clause 11 deals with the award of costs between the parties in cases involving community legal service funding. It gives assisted persons broadly the same statutory protection against costs as exists now. Clause 11(1) was amended in Committee to provide for that protection to be disapplied in prescribed circumstances, to make it clear that it applied only when the assisted person was receiving funding, and generally to simplify the drafting of the subsection. The amendments are consequential on that simplification. Amendments Nos. 12 and 13 simply ensure the consistent use of tenses throughout the clause.
Amendments Nos. 14 and 15 rephrase and reposition clause 11(4)(c), which deals with the payment of costs by the Legal Services Commission to the opponent of an assisted person. At present, a court can order the Legal Aid Board to pay an opposing defendant's costs if he or


she would otherwise suffer severe financial hardship. Regulations that are contemplated under the Bill will broadly replicate that position although the Government hope to relax the test to plain financial hardship.
It is necessary to rephrase the paragraph to refer to the costs incurred by the opponent, rather than those ordered against the assisted person; otherwise, the costs that the commission could be ordered to pay would be limited by the protection enjoyed by the assisted person. That anomaly did not arise with the previous drafting of clause 11(1).
Amendments Nos. 16 and 21 are consequential on the repositioning of clause 11(4)(c). The latter ensures that regulations under that paragraph remain subject to the affirmative procedure.

Amendment agreed to.

Amendments made: No. 13, in page 9, line 36, leave out 'the services were funded,' and insert
'services are funded by the Commission as part of the Community Legal Service,'.

No. 14, in page 9, leave out lines 40 and 41.

No. 15, in page 9, line 44, at end insert—
'(da) requiring the payment by the Commission of the whole or part of any costs incurred by a party for whom services are not funded by the Commission as part of the Community Legal Service,'.

No. 16, in page 9, line 46, leave out 'such a party' and insert
'a party for whom services are so funded'.—[Mr. Vaz.]

Clause 12

THE CRIMINAL DEFENCE SERVICE

Amendments made: No. 89, in page 10, line 38, at end insert—

'(4A) The Commission may charge—


(a) for accreditation,
(b) for monitoring the services provided by accredited persons and bodies, and
(c) for authorising accreditation by others;

and persons or bodies authorised to accredit may charge for accreditation, and for such monitoring, in accordance with the terms of their authorisation.'.

No. 90, in page 10, line 40, leave out 'subsection (4)' and insert 'subsections (4) and (4A)'.—[Mr. Vaz.]

Clause 16

CODE OF CONDUCT

Mr. Vaz: I beg to move amendment No. 17, in page 13, line 7, at end insert—
'and duties on employees who are members of a professional body to comply with the rules of the body.'.
Amendment No. 17 reflects an undertaking made by the Government in Committee in response to an amendment tabled by the hon. and learned Member for Harborough (Mr. Garnier) and others. He sought to add to the list of matters which must be included in the code of conduct for employees of the Legal Services Commission who provide criminal defence services. In response, my hon. Friend the Member for Ashfield

(Mr. Hoon), now the Minister of State, Foreign and Commonwealth Office, said that although it was not really necessary, he was content to introduce an amendment.
Amendment No. 17, therefore, requires the code specifically to include duties on employees providing criminal defence services who are members of a professional body—they might be barristers, solicitors or legal executives—to comply with the rules of that body.
The amendment shows that the Government are willing to put into statute sensible amendments such as the one tabled by the hon. and learned Member for Harborough, and I am most grateful to him for his suggestion on this issue.

Mr. Garnier: I thank the Minister for delivering on the undertaking given by his predecessor.

Amendment agreed to.

Clause 22

POSITION OF SERVICE PROVIDERS AND OTHER PARTIES

The Solicitor?General: I beg to move amendment No. 18, in page 16, line 17, leave out second 'of' and insert 'to'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 19, 20, 22, 45 to 69 and 83.

The Solicitor-General: This group of amendments clarifies the powers to prescribe the procedures for courts carrying out functions under part I of the Bill, particularly in relation to granting rights to representation in criminal cases. It also includes a number of consequential and drafting amendments. Let me explain.
Amendment No. 19 provides a general power to prescribe which member or officer of a court is able to exercise the functions of any court or tribunal under this part of the Bill. For example, it would enable regulations to prescribe the procedure for consideration of an application for a right to representation. In the case of the Crown court—assuming a right to representation has not been granted already by the magistrates court—the power might be exercised by a judge, though not necessarily the trial judge. For the sake of flexibility, however, it might be appropriate to provide, as now, for an authorised officer in the Crown court office to consider these applications.
Similarly for the magistrates court, amendment No. 53 gives the power to prescribe when a single justice or justices' clerk can make decisions about the right to representation. The first part of the amendment would enable the powers of the magistrates court to grant or withdraw a right to representation to be exercisable by a single justice. The general rule-making power in section 144 of the Magistrates' Courts Act 1980 can then be used to delegate this to justices' clerks and their assistants.
Amendment No. 20 provides the flexibility to prescribe different provisions for different areas, to accommodate, for example, pilot arrangements.
Streamlining the legislative provisions for delegation in that way will mean that there will be no further need for section 49(1)(j) of the Crime and Disorder Act 1998, which can be repealed when the relevant provisions of this Bill are in force. That is achieved by amendment No. 83.
Amendments Nos. 61, 66 and 67 clarify the appeal procedure against an order to repay defence costs under clause 17. This is to be by way of judicial review.
Clause 17 does not expressly provide for a route of appeal. Decisions of the Crown court that relate to a trial on indictment cannot be judicially reviewed or subject to appeal by way of case stated. This has been held to prevent any form of appeal against certain decisions about legal aid contribution orders. Decisions relating to a sentence may of course be appealed to the Court of Appeal, but recovery of defence costs orders should not be seen as part of a sentence. It is possible, for example, that regulations could prescribe for exceptional circumstances in which an order could be made before the end of the trial or following acquittal.
In order to avoid doubt about the status of an order under clause 17 and the relevant route of appeal, amendment No. 61 makes it clear that these orders are not part of the sentence and therefore not appealable to the Court of Appeal. Amendment No. 66 amends the Supreme Court Act 1981 to allow clause 17 orders to be challenged by way of judicial review or case stated. Amendment No. 67 is consequential on amendment No. 66.
Further consequential alterations are contained in amendment No. 69.
Amendments Nos. 49 and 52 are drafting amendments to make it clearer that a right to representation will usually continue through from the magistrates court to the Crown Court.
A right to representation includes a right to advice and assistance as to an appeal. As currently drafted, it is an open-ended entitlement. Amendment No. 22 would allow regulations to prescribe time limits for the provision of advice on appeal after which the right would lapse. Regulations on the scope of advice and assistance could be made under clause 13 to allow for cases where advice was needed at a later date.
Finally, amendments Nos. 18, 45 to 48, 50, 51, 54 to 60, 62 to 65 and 68 achieve drafting consistency by always referring to the right as a "right to representation".

Amendment agreed to.

Amendment made: No. 19, in page 16, line 30, at end insert—
'(6) Regulations made under subsection (5) may in particular authorise the exercise of the functions of any court or tribunal by any member or officer of that or any other court or tribunal.'.—[Mr. Vaz.]

Clause 25

ORDERS, REGULATIONS AND DIRECTIONS

Amendments made: No 20, in page 17, line 29, at end insert '(including different areas)'.

No. 21, in page 17, line 32, leave out '(c)' and insert '(da)'.—[Mr. Vaz.]

Clause 26

INTERPRETATION

Amendment made: No. 22, in page 18, line 5, after first 'and', insert
', subject to any time limits which may be prescribed,'.—[Mr. Vaz.]

Schedule 1

LEGAL SERVICES COMMISSION

The Solicitor-General: I beg to move amendment No. 38, in page 65, line 28, leave out
', with the approval of the Treasury,'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 39 to 44.

The Solicitor-General: You will be pleased to know, Mr. Deputy Speaker, that the purpose of these seven amendments is to remove the requirement for Treasury consent or approval to arrangements for the pay, pensions and compensation of members and staff of the Legal Services Commission.
The amendments reflect the fact that it is no longer the practice for new legislation to make pay and pensions provisions for non-departmental public bodies subject to Treasury consent. The commission's pay and pensions arrangements will continue to be subject to the approval of the Lord Chancellor, who will consult the Treasury as appropriate on issues affecting spending and general policy on public pay, pensions and compensation terms.

The amendments are technical, designed to bring the relevant provisions in line with current Treasury policy.

Amendment agreed to.

Amendments made: No. 39, in page 65, line 32, leave out
', with the consent of the Treasury,'.

No. 40, in page 65, line 33, leave out
', with the consent of the Treasury,'.

No. 41, in page 65, line 46, leave out
'and consent of the Treasury'.

No. 42, in page 65, line 49, leave out
'and the consent of the Treasury'.

No. 43, in page 66, line 16, leave out

'and consent of the Treasury'.

No. 44, in page 66, line 41, leave out
', with the consent of the Treasury,'.—[Mr. Vaz.]

Schedule 2

COMMUNITY LEGAL SERVICE: EXCLUDED SERVICES.

Mr. Robert Marshall-Andrews: I beg to move amendment No. 95, in page 68, line 32, at end insert
'and actions brought by or on behalf of children under 18, patients within the meaning of the Mental Health Act 1983, persons with disabilities within the meaning of section 1(1) of the Disability Discrimination Act 1995 and persons in receipt of Income Support, save that services shall not be funded if the Commission is satisfied in any individual case that a conditional fee agreement is available.'.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 99, in page 68, line 32, at end insert
'save where compelling reasons exist'.

Mr. Marshall?Andrews: The purpose of the amendment is to retain legal aid in its present form for actions for damages for personal injury for the classes of people referred to in the amendment.
Legal aid was an essential part—to use the topical vernacular, it was one of the key or core parts—of the welfare state. It was thought at the time that the poor should have the benefit in actions brought by them of access to the best available legal advice and assistance, and that they should have available to them all the rights of the courts. That was regarded at the time as being as important as access to health and to welfare.
8 pm
If the Bill is to become an Act in its unadorned and unamended form, the classes of people to whom I have referred will have no recourse to legal aid for personal injury cases. In all cases, legal aid for actions for personal injury will cease to exist. No matter how weak or disabled the plaintiff; no matter how serious the injury; no matter how powerful the wrongdoer; no matter how culpable or deliberate the wrong, there will be no legal aid for those people.
This is a reforming Bill with which, in many respects, I agree. Whatever happens to the amendment—I sincerely hope that it will be agreed to even if the Government do not accept it, which I sincerely hope they will—I will support the Bill. There are many aspects of it that I have no difficulty whatever in supporting. I say straight away that the provision of legal aid has become, in certain circumstances, less than perfect. There have been examples in which it has been abused, and there are ways in which it is far too expensive, some of which the Bill redresses.
There is one aspect of the legal aid system to which that does not apply—the element that funds personal injury cases. Do not take that from me, Mr. Deputy Speaker—under any circumstances. I wish to give hon. Members the full benefit of an opinion expressed in 1996:
Supporters of legal aid must never seek to emphasise that this is a highly successful public social service. In civil cases which reached judgment in 1995–1996, there were judgments in favour of the assisted person in 81 per cent. of the cases. The proportion of cases where there was either a settlement or a judgment in favour was 91 per cent.
The sage goes on:
Personal injury litigation as a category was conspicuously successful. Obviously, the greater the success rate, the closer the legal aid system can approach self-funding. These success figures tell against any argument that legal aid is generally granted too readily. It must be remembered that there are a small number of very high-cost cases which account for a large proportion of expenditure.
That ringing endorsement of the legal aid system, and personal injury legal aid in particular—that luminous prose, with whose every word I agree—fell from the mouth of the Lord Chancellor himself in 1996.
We do not have the Lord Chancellor here, more's the pity. That is something on which I have a certain view that I have expressed from time to time. He is in another

place. We do have my hon. Friend the Parliamentary Secretary here, and I join in the paeans of praise and congratulations to him. What a joy it is to see him on the Front Bench. However, it is not the same. If we are to penetrate what has happened since 1996, we have look through a prism darkly to find out why the Lord Chancellor—the font of the legislation—should have done such a conspicuous volte face.
It cannot be anything to do with the statistics for this part of the legal aid system, as they speak for themselves. Legal aid in personal injury cases funded 75,000 cases last year; those that were funded recovered £502 million in damages. The cost of that was £224 million. However, 86 per cent. of that was recouped as costs. The cost to the Exchequer of this noble public service was £34 million.
If one takes into account the VAT that the lawyers paid back into the Exchequer, the net cost of this public service after VAT was recouped—described in the way I have just outlined by the Lord Chancellor—was £1,481,936. If one then takes into account the money clawed back by the Exchequer from damages that had been paid out in welfare payments to those who were successful plaintiffs in these cases, there is a net profit to the Exchequer of £68 million.
The one argument that does not stand up—I expect I am wasting my breath, as I doubt whether the Parliamentary Secretary will advance it—is that the reform will bring a penny piece back into legal aid which can be reallocated or retargeted to other areas.
Why are we faced with this Bill? Why is this protection to be taken from the particularly vulnerable categories of people who are referred to in the amendment? What has occurred has been the advent of conditional fee agreements. Conditional fee agreements were introduced in 1995 as an experiment. They are more usually, but inaccurately, referred to as no-win, no-pay agreements.
The advantage is that lawyers will bear the risk of litigation, and if someone does not win and they do not get their costs back from the other side, the litigant does not pay. No-win, no-pay litigation; something against which the legal profession had set its face for centuries, because it was felt that it was unethical—or at least unwise—that lawyers should have an interest in their clients' damages.
A system was put into effect in 1995 with various checks and balances. Whereas I acknowledge that there are aspects of conditional fee agreements which may be beneficial to many people—particularly to middle-income England—there are aspects of conditional fee agreements which are positively dangerous to people with disabilities. And there are many other aspects of conditional fee agreements which are, as yet, untried.
If one is injured, rendered disabled or maimed by accident or design, instead of obtaining legal aid—which would be one's right if one had a prima facie case and a solicitor available to take the case—it is now necessary to trail the coat of one's damages from solicitor to solicitor until it is possible to find one who is holding the right portfolio of risk to take the case. The right portfolio of risk in any individual case will depend on the other cases that any individual solicitor has in his portfolio. That will make it necessary to move from solicitor to solicitor to find one who can take the case.
It is true that there have been about 30,000 cases under conditional fee agreements, and there is no reason to suppose that they are manifestly unsuccessful, but the


only authoritative study pointed out immediately that the overwhelming preponderance were small cases. That is not surprising, because lawyers will generally take small cases in which the risk is limited.
What happens when the avalanche of the 75,000 cases currently funded under legal aid falls into the system? Whether the provision will exist to cope with the most complex and difficult of those cases is a complete imponderable. The study by the Policy Studies Institute at the end of 1997 concluded:
However, on the basis of the evidence currently available, there is serious cause for concern about whether the scheme is operating fairly and consistently. Future research will need to focus on this issue.
There has been no authoritative research since then.
The Bill will consign the weakest and most vulnerable in the land to a completely untried no win, no fee system, and they will have no other redress. The more badly injured one is, the more difficult it is to trail one's coat from lawyer to lawyer looking for someone to take the case; and the more difficult and legally complex one's case, with quantum and medical reports and experts, the less likely one is to find a lawyer who will undertake all the disbursements and costs.

Mr. John M. Taylor: Would it not also be much harder in such cases to define a win?

Mr. Marshall-Andrews: Indeed. I will come to that point.
I am not against conditional fee agreements, because if people come to me or another lawyer and say that they are just above the legal aid framework but have been injured and cannot afford legal fees, I have never had any problem with saying, "Well, now you are destitute, but if the case is won you will be in funds and will be able in due course to pay me; if we don't win, no fee."
There is, however, an enormous problem in the fact that under the conditional fee system we are allowed to uplift—that is the euphemism for hike—fees up to 100 per cent. It will not surprise hon. Members to know that if lawyers have the facility to hike or uplift their fees, they do it. The assessment of risk on which they hike the fees is their own assessment and not subject to outside expertise or adjudication.
8.15 pm
The Policy Studies Institute considered a number of solicitors and a very large number of cases and compared the risk with the uplift. It was in no doubt about its conclusions. It said that there were more low-risk cases than high-risk cases; the weighted number of cases in which the uplift appeared too high was 257, as against 122 in which it appeared low.
You, Mr. Deputy Speaker, would have your wits about you in such circumstances and would be able to analyse with clarity whether the advice that you were getting was accurate; but the more disabled or in need of assistance the plaintiffs—be they children, mental patients or the very poor—the more inarticulate they are likely to be and the less able to analyse whether the uplift is suitable.
Under conditional fee agreements, it is necessary to take out insurance against having to pay the defendant's costs. It is a wishful thought that the burden of the premium would be borne by the solicitor, but the plain fact is that, as of now, on the research available, it is being borne by the plaintiff. The more disadvantaged the plaintiff, the less likely it is that he or she will be able to afford the premium.
At present the premiums are quite small, averaging about £95, but the only analysis is of small cases; the great preponderance are simple and straightforward liability cases: normally motor accidents. What will happen when the brain-damaged child in an occupier's liability case finds a proper solicitor who is not charging over the top for the uplift and is then asked for the insurance premium? In a case in which the damages—for lifelong disability—are likely to be £1.5 million or £2 million and the costs on either side in six figures, the premium will almost certainly be prohibitive.
The Government's answer to what appears to be a self-evident case for excluding disadvantaged groups from the prohibition on personal injury cases is the hardship fund. A fund is to be created from which it will be possible, in exceptional circumstances, for solicitors to apply for assistance. No criteria have been properly set out on whether the fund will be available in any given case.
It is completely contrary to the principle of such welfare provision that the exception is made only if one can demonstrate to an official that there is exceptional hardship. The amendment is thus entirely reasonable. It preserves legal aid for such cases at nil cost to the Exchequer, as we have already demonstrated. To show the total reasonableness of our approach, it retains legal aid but provides that, even in such cases, legal aid will not be available if the determining officer is satisfied that a suitable conditional fee agreement is available.
The effect will be that, faced with those disadvantaged groups, a solicitor will apply for legal aid as of right. The determining officer will be able to ask that solicitor why a conditional fee agreement is not available and the solicitor will say, "Because of the immense complexity of the matters involved."

Mr. Deputy Speaker: Order. May I gently remind the hon. and learned Gentleman that he should address the Chair?

Mr. Marshall-Andrews: Of course, Mr. Deputy Speaker. The determining officer will then be able to say, "We will provide money from the hardship fund." Thus the right is preserved, and will be removed only if there is a genuine alternative available. That would retain a perfect system.

Mr. Nick Hawkins: I speak in support of amendment No. 99, standing in the names of my right hon. and hon. Friends and myself, and also supported by the hon. Member for Torridge and West Devon (Mr. Burnett). I thank the hon. Gentleman and the Minister for their kind congratulations. I am especially pleased that you, Mr. Deputy Speaker, are in the Chair when I speak for the first time as an official Opposition spokesman, given our mutual links with the town of Bedford and our interest in sport, which may be relevant to one of the cases that I wish to cite on this very serious matter.
I also pay tribute to the hon. and learned Member for Medway (Mr. Marshall-Andrews). On Second Reading, the hon. and learned Gentleman spoke immediately after me and we found much common ground on that occasion, as on this. Both of us have spent much time representing people in court on the same circuit. In his longer and more distinguished legal career, he has frequently taken up causes such as that which he supports tonight. Although amendment No. 99 is in slightly different terms to amendment No. 95, I know that he will acknowledge that it is to much the same effect. Both of us seek to persuade the Government that it is crucial to protect the rights and the needs of the disadvantaged—those in greatest need.
In the past in a debate in a previous Parliament, I was the first hon. Member to use the acronym MINELA—or middle income, not eligible for legal aid. MINELAs are a hard-pressed group. Unfortunately, the Government will create many more MINELAs because many more people will not be eligible for legal aid.
It is a pleasure to me to talk about those with a compelling reason to need legal aid. I pay tribute to many voluntary organisations that have worked with the Law Society and the Bar Council, on whose general management committee I had the honour to serve for several years, in seeking to advance the case of those who will be in need of legal aid in the future, as many people have been in the past. It has been a good campaign, supported by a variety of voluntary groups. The Law Society, in its briefing for the Report stage, mentions support from the Child Poverty Action Group, the Law Centres Federation, Mencap—for whom I was working along with many other hon. Members at an event this afternoon within the precincts of the Palace of Westminster—the Royal Association for Disability and Rehabilitation, or RADAR, the Royal National Institute for Blind People, the Advice Services Alliance, the Consumers Association, Justice, the Legal Action Group, the National Association of Citizens Advice Bureaux, Refuge, the Royal National Institute for Deaf People and the Institute of Legal Executives. That is a powerful coalition supporting the arguments that the hon. and learned Member for Medway and myself are putting tonight to try to persuade the Government, even at the last minute, that there are good reasons to keep legal aid available for those in greatest need where compelling reasons exist.
I recommend the excellent publication The Lawyer to all hon. Members, even if they are not lawyers, because it has highlighted the problems with the Bill sensibly and clearly. It has described cases from the past that show why legal aid should continue to be available in the future. I said that one of those cases involved sport, and it is well known to all hon. Members, being the case of Ben Smoldon, who was just 17 when he tragically broke his neck during a rugby match in 1991. In the case of Smoldon v. Whitworth and Nolan, the principles that affect the control of rugby matches—a game well loved by you, Mr. Deputy Speaker, and me—were set out. That case, of a 17-year-old injured in a rugby match through no fault of his own, was tragic and there was no doubt that legal aid was vital. Ben Smoldon's solicitor, Mr. Lee of Evill and Coleman said
The Legal Aid Board always supported the case even though it knew there was a chance we wouldn't be successful. The prospects of a win were just not high enough for us to take this on a no win, no fee basis.

I am sure that the hon. and learned Member for Medway will agree that that is the kind of case in which legal aid is vital.
The next example suggested by The Lawyer is the case of Justice for the Longcare Survivors v. Buckinghamshire County Council. As that case is still pending, I shall not go into any details, but it concerns allegations of child abuse. It is another example of a case in which legal aid for those bringing cases in the civil courts will be vital. Another example is the case of Daniel Burnett suing by his "next friend" in James Potter v. Steven John Duckworth, in which a 17-year-old cyclist was left with severe head injuries after being hit by a car in November 1993. He succeeded in that case in proving the liability of the driver despite completely conflicting statements by witnesses. Daniel Burnett's mother said:
My son's life has been ruined through no fault of his own. I just can't imagine what we would have done if we hadn't been able to bring this case.
Legal aid was vital in enabling them to do so.
Another case cited was that of Dipesh Parmar v. E Castle. The Lawyer says:
Six-year-old Dipesh Parmar was left confined to a wheelchair and in need of permanent artificial ventilation after a lorry attempted a right turn into the path of the vehicle that he was travelling in.
His solicitor said:
Had the family not been entitled to legal aid they would not have been able to fund the medical reports, which would have made the case very difficult.
That is another case that is an example of the compelling reasons for legal aid to continue to exist.
Another example is the case of June Hancock v. JW Roberts Ltd. The Lawyer says:
In 1996 a dying woman successfully won damages of £65,000 for the effects of asbestos dust in an area where she had played as a child around 60 years earlier.
Her solicitor worked for the Sheffield firm of Irwin Mitchell, which specialises in personal injury matters, among other things. He said:
It was a very, very difficult case, the like of which I doubt I will ever see again. Lots of firms refused to take it, even on a legal aid basis … My fear is that such ground-breaking cases will not be brought forward in the future, because without legal aid support lawyers will not be able
to take them on.
The cases that I have cited are very powerful. I hope that hon. Members on all sides of the House will recognise that a powerful coalition of voluntary organisations supports the proposals contained in the amendments.

Mr. David Kidney: I hope that the hon. Gentleman will clarify something for me. The Bill allows the Lord Chancellor, by direction, to disapply the bar on personal injury cases, and the explanatory notes state that the Lord Chancellor has in mind cases in the public interest or with high investigative costs. Amendment No. 99 states that the bar would be disapplied
save where compelling reasons exist".
Is that an attempt to insert into the Bill a statutory recognition of the explanatory notes, or will the "compelling reasons" go wider than the classes of case mentioned in those notes?

Mr. Hawkins: My intention is that the words "compelling reasons" would go wider. The all-encompassing phrase in the amendment is intended to cover the types of cases that I offered as examples, and the points made by the hon. and learned Member for Medway. The amendment goes much wider than the disapplication of the bar proposed in the Bill and explained in the notes.
Finally, I shall quote from Counsel magazine, a publication covering the work of those who share my profession at the Bar. An article by David Bean QC, a distinguished employment lawyer, discusses the Bill's abolition of legal aid for personal injury actions and calls it puzzling.
Puzzling, because it is both unpopular and unnecessary. The success rate for legally aided plaintiffs is very high: the few cases which have been wrongly allowed to proceed could be reduced to a trickle by a more rigorously applied merits test and the new powers under the Civil Procedure Rules to dispose summarily of weak cases.
The Government are not allowing those new powers to be used. They want the blanket removal of legal aid for personal injury. We think that that is wrong, and that "compelling reasons" should allow legal aid.

Mr. Vaz: This has been a good debate, although short. I begin by thanking my hon. and learned Friend the Member for Medway (Mr. Marshall?Andrews) for ensuring that the House had an opportunity to discuss these matters.
I have enormous respect for my hon. and learned Friend and have admired him for many years. We are bonded through the threads of history, as we fought elections in the former Richmond and Barnes constituency in successive years. He got 8,000 votes, and I got 3,000, which makes him three times the man that I am.
My hon. and learned Friend raised some very important issues with his amendment, and I hope that I will be able to deal with them all in the short time available. I know what his views are, as I have read them in The Guardian. In an article published on 23 March, he described the Bill as "good, bad and awful". He made a passionate and eloquent case for the amendment, but I hope to convince him that the Government are as concerned as he is and that he need not worry, as all the groups that he mentioned will be protected under the Bill.
Amendment No. 95 would ensure that legal aid was available in personal injury cases for children, patients within the meaning of the Mental Health Act 1983, persons with disabilities and people in receipt of income support, unless the commission decided that a conditional fee agreement was available in an individual case. It has been made clear on many occasions that the Government have decided to withdraw legal aid from the vast majority of personal injury cases because they are satisfied that a conditional fee agreement will be available in that majority of cases. To insist that the commission examine every case individually to ensure that such an agreement is available would create enormous administrative expense, which would lead inevitably to a reduction in the money available to fund deserving cases.

Mr. Burnett: Who is expected to pay the insurance premiums for after-the-event cover of defendants' costs in respect of the conditional fee agreements?

Mr. Vaz: As I shall explain, the insurance premium point has been dealt with. The premium is recoverable in the event of a successful action, and practitioners should be able to bear the initial cost.
There is no reason why those who lack the legal capacity to act for themselves should not be able to benefit from a conditional fee agreement. I accept that special provision may need to be made for individuals lacking legal capacity in the regulations governing the use of conditional fees. My Department will consult on draft regulations over the summer and will specifically seek views on this issue.
It is important that a litigation friend acting on behalf of a child or patient should fully understand the conditional fee agreement and any potential liability that he or she is accepting on the child's or patient's behalf. It is sometimes suggested that children and patients are unsuitable—for reasons of age or disability—for conditional fee agreements, because gathering the evidence required to establish whether there is a viable case is lengthy and costly. That may be so, but, as the Lord Chancellor and my predecessor have repeatedly pointed out, help will still be available where the initial investigation is exceptionally expensive. The hon. Member for Surrey Heath (Mr. Hawkins) cited the cases of Ben Smoldon and others. Under the directions already announced, that case, and most of the others quoted from The Lawyer, would clearly be eligible for legal aid.
It is asserted that it can be very hard to win cases because a court might not accept evidence from the people to whom I have referred. I acknowledge that that may be true, but I do not accept that we should commit public funds to support a case in which a solicitor knows that an individual—for whatever reason—has a very small chance of success. I would go further: everyone involved should think carefully before placing a vulnerable person in the position of taking forward litigation if they know from the outset that the chances of success are slim.

Mr. Grieve: The Minister said that the cases cited by my hon. Friend the Member for Surrey Heath (Mr. Hawkins) would have been eligible for the help that he is describing. He may say that with the benefit of hindsight, but he has also suggested that the help will not be available under the criteria that he will apply. He will deprive the litigant of the assistance required in precisely those cases in which it is most difficult to assess whether they will succeed at trial.

Mr. Vaz: I am surprised at the hon. Gentleman, who is a barrister. He was not listening to me. I said that most of the cases cited by the hon. Member for Surrey Heath would be covered. I also said that a case would be covered if there was a high investigative cost or if the wider public interest applied.
The amendment would offer similar protection to all individuals who have a disability within the meaning of the Disability Discrimination Act 1995. Some of those individuals will be patients under the Mental Health Acts, and I have already dealt with their position. For the rest, it is frankly insulting to assume that simply because a person has a disability, he or she is in some way less capable of running his or her own affairs and reaching an agreement with a solicitor than a person without such a disability would be. The amendment would extend legal aid to all people with disabilities, regardless of their means. That is not the position now, and I do not accept that it should be the position.
Finally, the amendment would give legal aid in personal injury cases to individuals on income support. It is alleged that many people on income support would


be unable to afford even the modest insurance fees charged to support a personal injury case. That may well be so, but as the Lord Chancellor and others have pointed out, we do not expect such individuals to bear the cost of premiums. Insurance premiums and disbursements are generally low in personal injury cases, and we expect solicitors' firms to bear the costs as normal business overheads. Such cases are profitable for solicitors, allowing them to recover a percentage uplift in addition to their usual fee. There is no reason why they, like any other business, should not bear overheads before a profit can be realised.
I shall tell the House just how inexpensive the majority of cases are. In 1996–97, some 83,852 personal injury cases were funded by legal aid. Of those, 11,868 were clinical negligence cases, which will remain within the scope of the law. Of the remaining 71,984 cases, 89 per cent. cost £6,000 or less, 84 per cent. cost £5,000 or less, and 81 per cent. cost £4,000 or less. Those figures are total costs for the cases—all disbursement costs, including counsel's fees. With all costs included, the vast majority cost less than £4,000. The average amount of disbursements paid out by solicitors in cases costing £4,000 or less was only £304.
It is clear from the costs that those cases did not require exceptionally large amounts of work or expenditure by the solicitors. Nor were the costs of investigation particularly high. I do not accept that there is any reason why those on income support should be unable to benefit from conditional fee agreements.

Dr. Lynne Jones: In such cases, where conditional fee agreements were available, people would not be eligible for legal aid under my hon. Friend's amendment. Is that not the case?

Mr. Vaz: Conditional fee agreements have worked in the cases that I have mentioned, and they will work. Since I took on this job, I have visited several legal aid firms. I have not come across a legal adviser who has not said that the schemes work. It is wrong to commit taxpayers' money for cases that have no chance of success. That is why we cannot accept the amendment.
On amendment No. 99, to which the hon. Member for Surrey Heath spoke, my predecessor said in Committee that we might have sympathy with such an amendment if it were intended to do no more than signpost the fact that the Lord Chancellor had direction making powers to make exceptions to the exclusions in schedule 2, and that he could be expected to use them. Unfortunately, the amendment would not achieve that. It leaves unclear who is to define what constitutes a compelling reason. It could be the Lord Chancellor, the commission or even the applicant. As drafted, therefore, it is a recipe for confusion with all the scope that that would create for wasteful satellite litigation. In so far as it would allow the Lord Chancellor to define "compelling reasons", it is no more than a signal of our clear intentions and, as such, strictly unnecessary. The Lord Chancellor has frequently said that he will use his powers under clause 6(8) to authorise the commission to fund cases where the initial investigative costs or overall costs are exceptionally high and in cases that raise matters of wider concern.
My hon. and learned Friend the Member for Medway mentioned hardship cases. We will consult on the funding code in the autumn. People will have the opportunity to

comment on what he described as hardship cases. The commission already has power under clause 6(8)(b) to approach the Lord Chancellor to request him to authorise funding in an individual case, although he intends, quite rightly, to use that power only very exceptionally.
I stood at the last general election on the same manifesto as my hon. and learned Friend the Member for Medway. There is a belief that if people are cut, they bleed but that Ministers do not, even if they are stabbed in the back. We believe as firmly as he does in the need to protect all the people that he mentioned. The proposal will not prevent anyone who is going to get legal aid from receiving legal aid. We believe that our arrangements, with our approach to the funding code, which allows consultation and means that the funding code will have to come back to this House under the affirmative resolution procedure, will give people an opportunity to put forward their cases. I would not stand here at the Dispatch Box to ensure that any of those people would not get legal aid in such cases.

Mr. Marshall-Andrews: In the one minute remaining, may I say that I listened with great respect to my hon. Friend in the hope of being persuaded. I regret to say that I am not. On the core issue, the principle is still the same. The right to legal aid is being removed from the weakest in the land and in its place is being put only the possibility that they may, in individual cases, receive money from the hardship fund. I could not go into the Lobby with him on that basis and I will in due course press the amendment to a vote.

Mr. Garnier: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question accordingly put, That the amendment be made:—

The House divided: Ayes 173, Noes 291.

Division No. 216]
[8.44 pm


AYES


Ainsworth, Peter (E Surrey)
Clappison, James


Allan, Richard
Clark, Dr Michael (Rayleigh)


Amess, David
Cohen, Harry


Ancram, Rt Hon Michael
Collins, Tim


Arbuthnot, Rt Hon James
Cook, Frank (Stockton N)


Baldry, Tony
Corbyn, Jeremy


Beith, Rt Hon A J
Cormack, Sir Patrick


Benn, Rt Hon Tony (Chesterfield)
Cran, James


Bercow, John
Cryer, John (Hornchurch)


Beresford, Sir Paul
Curry, Rt Hon David



Blunt, Crispin
Dafis, Cynog


Body, Sir Richard
Dalyell, Tam


Boswell, Tim
Davey, Edward (Kingston)


Bottomley, Peter (Worthing W)
Davies, Rt Hon Denzil (Llanelli)


Bottomley, Rt Hon Mrs Virginia
Davies, Quentin (Grantham)


Brady, Graham
Davis, Rt Hon David (Haltemprice)



Brazier, Julian
Day, Stephen


Breed, Colin
Dorrell, Rt Hon Stephen


Brooke, Rt Hon Peter
Duncan, Alan


Browning, Mrs Angela
Duncan Smith, Iain


Bruce, Ian (S Dorset)
Emery, Rt Hon Sir Peter


Burnett, John
Evans, Nigel


Burns, Simon
Faber, David


Burstow, Paul
Fabricant, Michael


Butterfill, John
Fallon, Michael


Campbell, Rt Hon Menzies (NE Fife)
Fearn, Ronnie



Fisher, Mark


Chope, Christopher
Flight, Howard






Forth, Rt Hon Eric
Moore, Michael


Fox, Dr Liam
Moss, Malcolm


Fraser, Christopher
Norman, Archie


Gale, Roger
ÖOpik, Lembit


Garnier, Edward
Ottaway, Richard


George, Andrew (St Ives)
Page, Richard



Gibb, Nick
Paice, James


Gill, Christopher
Paterson, Owen


Gillan, Mrs Cheryl
Pickles, Eric


Gorman, Mrs Teresa
Prior, David


Gray, James
Randall, John


Green, Damian
Redwood, Rt Hon John


Greenway, John
Robathan, Andrew


Grieve, Dominic
Robertson, Laurence (Tewk'b'ry)


Gummer, Rt Hon John
Roe, Mrs Marion (Broxbourne)


Hamilton, Rt Hon Sir Archie
Ross, William (E Lond'y)


Hammond, Philip
Ruffley, David


Harris, Dr Evan
Russell, Bob (Colchester)


Hawkins, Nick
St Aubyn, Nick


Hayes, John
Sanders, Adrian


Heald, Oliver
Sayeed, Jonathan


Heath, David (Somerton & Frome)
Shephard, Rt Hon Mrs Gillian


Hogg, Rt Hon Douglas
Simpson, Keith (Mid-Norfolk)


Horam, John
Skinner, Dennis


Howard, Rt Hon Michael
Smith, Llew (Blaenau Gwent)


Hunter, Andrew
Smith, Sir Robert (W Ab'd'ns)


Hurst, Alan
Smyth, Rev Martin (Belfast S)


Jack, Rt Hon Michael
Spring, Richard


Jenkin, Bernard
Stanley, Rt Hon Sir John


Jones, Dr Lynne (Selly Oak)
Streeter, Gary


Key, Robert
Swayne, Desmond


King, Rt Hon Tom (Bridgwater)
Syms, Robert


Kirkbride, Miss Julie
Tapsell, Sir Peter


Kirkwood, Archy
Taylor, Ian (Esher & Walton)


Laing, Mrs Eleanor
Taylor, John M (Solihull)


Lait, Mrs Jacqui
Taylor, Matthew (Truro)


Lansley, Andrew
Taylor, Sir Teddy


Leigh, Edward
Tonge, Dr Jenny


Letwin, Oliver
Trend, Michael


Lewis, Dr Julian (New Forest E)
Tyler, Paul


Lidington, David
Tyrie, Andrew


Livingstone, Ken
Viggers, Peter


Livsey, Richard
Walter, Robert


Lloyd, Rt Hon Sir Peter (Fareham)
Wardle, Charles



Loughton, Tim
Waterson, Nigel


Luff, Peter
Webb, Steve


McDonnell, John
Wells, Bowen


MacKay, Rt Hon Andrew
Whitney, Sir Raymond


Maclean, Rt Hon David
Whittingdale, John


McLoughlin, Patrick
Willetts, David


Madel, Sir David
Willis, Phil


Mahon, Mrs Alice
Winterton, Mrs Ann (Congleton)


Major, Rt Hon John
Winterton, Nicholas (Macclesfield)


Malins, Humfrey
Wise, Audrey


Maples, John
Woodward, Shaun


Marshall, Jim (Leicester S)
Yeo, Tim


Marshall-Andrews, Robert
Young, Rt Hon Sir George


Mates, Michael



Mawhinney, Rt Hon Sir Brian
Tellers for the Ayes:


Michie, Bill (Shef'ld Heeley)
Mr. Kelvin Hopkins and


Michie, Mrs Ray (Argyll & Bute)
Mr. Alan Simpson.




NOES


Abbott, Ms Diane
Barron, Kevin


Adams, Mrs Irene (Paisley N)
Bayley, Hugh


Ainger, Nick
Beard, Nigel


Alexander, Douglas
Beckett, Rt Hon Mrs Margaret


Allen, Graham
Begg, Miss Anne


Anderson, Donald (Swansea E)
Benn, Hilary (Leeds C)


Anderson, Janet (Rossendale)
Benton, Joe


Armstrong, Rt Hon Ms Hilary
Betts, Clive


Ashton, Joe
Blackman, Liz


Atkins, Charlotte
Blears, Ms Hazel


Austin, John
Boateng, Paul


Banks, Tony
Borrow, David


Barnes, Harry
Bradley, Keith (Withington)





Bradley, Peter (The Wrekin)
Gordon, Mrs Eileen


Bradshaw, Ben
Griffiths, Jane (Reading E)


Brinton, Mrs Helen
Griffiths, Nigel (Edinburgh S)


Brown, Russell (Dumfries)
Griffiths, Win (Bridgend)


Browne, Desmond
Grocott, Bruce


Buck, Ms Karen
Grogan, John


Burden, Richard
Gunnell, John


Burgon, Colin
Hall, Mike (Weaver Vale)


Caborn, Rt Hon Richard
Hall, Patrick (Bedford)


Campbell, Alan (Tynemouth)
Hamilton, Fabian (Leeds NE)


Campbell, Mrs Anne (C'bridge)
Harman, Rt Hon Ms Harriet


Campbell, Ronnie (Blyth V)
Healey, John


Campbelt-Savours, Dale
Henderson, Ivan (Harwich)


Cann, Jamie
Hepburn, Stephen


Casale, Roger
Heppell, John


Cawsey, Ian
Hesford, Stephen


Chapman, Ben (Wirral S)
Hewitt, Ms Patricia


Chaytor, David
Hill, Keith


Clark, Rt Hon Dr David (S Shields)
Hinchliffe, David


Clark, Dr Lynda (Edinburgh Pentlands)
Hodge, Ms Margaret



Hood, Jimmy


Clark, Paul (Gillingham)
Hope, Phil


Clarke, Charles (Norwich S)

Howarth, George (Knowsley N)


Clarke, Rt Hon Tom (Coatbridge)
Howells, Dr Kim


Clarke, Tony (Northampton S)
Hoyle, Lindsay


Clelland, David
Hughes, Ms Beverley (Stretford)


Clwyd, Ann
Humble, Mrs Joan


Coaker, Vernon
Hutton, John


Coffey, Ms Ann
Iddon, Dr Brian


Coleman, Iain
Illsley, Eric


Colman, Tony
Jackson, Ms Glenda (Hampstead)


Connarty, Michael
Jackson, Helen (Hillsborough)


Corbett, Robin
Jamieson, David


Corston, Ms Jean
Jenkins, Brian


Cousins, Jim
Johnson, Alan (Hull W & Hessle)


Cranston, Ross
Johnson, Miss Melanie (Welwyn Hatfield)


Crausby, David



Cummings, John
Jones, Barry (Alyn & Deeside)


Cunningham, Jim (Cov'try S)
Jones, Mrs Fiona (Newark)


Darling, Rt Hon Alistair
Jones, Helen (Warrington N)


Darvill, Keith
Jones, Jon Owen (Cardiff C)


Davey, Valerie (Bristol W)
Jones, Martyn (Clwyd S)


Davidson, Ian
Jowell, Rt Hon Ms Tessa


Dawson, Hilton
Keeble, Ms Sally


Dean, Mrs Janet
Keen, Alan (Feltham & Heston)


Denham, John
Keen, Ann (Brentford & Isleworth)


Dismore, Andrew
Kemp, Fraser


Dobbin, Jim
Khabra, Piara S


Donohoe, Brian H
Kidney, David


Doran, Frank
Kilfoyle, Peter


Dowd, Jim
King, Andy (Rugby & Kenilworth)


Drew, David
King, Ms Oona (Bethnal Green)


Drown, Ms Julia
Kumar, Dr Ashok


Dunwoody, Mrs Gwyneth
Ladyman, Dr Stephen


Eagle, Angela (Wallasey)
Lawrence, Ms Jackie


Eagle, Maria (L'pool Garston)
Lepper, David


Edwards, Huw
Leslie, Christopher


Efford, Clive
Levitt, Tom


Ellman, Mrs Louise
Lewis, Ivan (Bury S)


Ennis, Jeff
Lewis, Terry (Worsley)


Fitzsimons, Lorna
Liddell, Rt Hon Mrs Helen


Flint, Caroline
Linton, Martin


Follett, Barbara
Lloyd, Tony (Manchester C)


Foster, Michael Jabez (Hastings)
Lock, David


Foster, Michael J (Worcester)
Love, Andrew


Foulkes, George
McAvoy, Thomas


Galloway, George
McCabe, Steve


Gapes, Mike
McCartney, Rt Hon Ian (Makerfield)


Gardiner, Barry



George, Bruce (Walsall S)
McDonagh, Siobhain


Gerrard, Neil
Macdonald, Calum


Gibson, Dr Ian
McGuire, Mrs Anne


Gilroy, Mrs Linda
McIsaac, Shona


Godsiff, Roger
McKenna, Mrs Rosemary


Goggins, Paul
McNulty, Tony


Golding, Mrs Llin
Mactaggart, Fiona






McWalter, Tony
Sarwar, Mohammad


McWilliam, John
Savidge, Malcolm


Mallaber, Judy
Sawford, Phil


Mandelson, Rt Hon Peter
Sedgemore, Brian


Marsden, Paul (Shrewsbury)
Sheerman, Barry


Marshall, David (Shettleston)
Short, Rt Hon Clare


Martlew, Eric
Singh, Marsha


Maxton, John
Smith, Angela (Basildon)


Meacher, Rt Hon Michael
Smith, Rt Hon Chris (Islington S)


Meale, Alan
Smith, Jacqui (Redditch)


Merron, Gillian
Smith, John (Glamorgan)


Milburn, Rt Hon Alan
Snape, Peter


Miller, Andrew
Soley, Clive


Mitchell, Austin
Squire, Ms Rachel


Moonie, Dr Lewis
Starkey, Dr Phyllis


Moran, Ms Margaret
Steinberg, Gerry


Morgan, Ms Julie (Cardiff N)
Stewart, David (Inverness E)


Morley, Elliot
Stewart, Ian (Eccles)


Mountford, Kali
Stinchcombe, Paul


Mudie, George
Stoate, Dr Howard


Murphy, Denis (Wansbeck)
Stott, Roger


Murphy, Jim (Eastwood)
Strang, Rt Hon Dr Gavin


Naysmith, Dr Doug
Straw, Rt Hon Jack


Norris, Dan
Stringer, Graham


O'Brien, Mike (N Warks)
Stuart, Ms Gisela


Olner, Bill
Taylor, Rt Hon Mrs Ann (Dewsbury)


Organ, Mrs Diana



Osborne, Ms Sandra
Taylor, Ms Dan (Stockton S)


Palmer, Dr Nick
Thomas, Gareth (Clwyd W)


Pearson, Ian
Thomas, Gareth R (Harrow W)


Pendry, Tom
Timms, Stephen


Pickthall, Colin
Tipping, Paddy


Pike, Peter L
Todd, Mark


Plaskitt, James
Touhig, Don


Pollard, Kerry
Trickett, Jon


Pope, Greg
Turner, Dennis (Wolverh'ton SE)


Pound, Stephen
Turner, Dr Desmond (Kemptown)


Powell, Sir Raymond
Twigg, Derek (Halton)


Prentice, Ms Bridget (Lewisham E)
Twigg, Stephen (Enfield)


Prentice, Gordon (Pendle)
Vaz, Keith


Prescott, Rt Hon John
Walley, Ms Joan


Primarolo, Dawn
Ward, Ms Claire


Purchase, Ken
Wareing, Robert N


Quinn, Lawrie
Watts, David


Radice, Giles
White, Brian


Rammell, Bill
Whitehead, Dr Alan


Raynsford, Nick
Wicks, Malcolm


Reed, Andrew (Loughborough)
Williams, Rt Hon Alan (Swansea W)


Reid, Rt Hon Dr John (Hamilton N)



Robinson, Geoffrey (Cov'try NW)
Williams, Alan W (E Carmarthen)


Roche, Mrs Barbara
Wills, Michael


Rooker, Jeff
Winnick, David


Rooney, Terry
Winterton, Ms Rosie (Doncaster C)


Ross, Ernie (Dundee W)
Woolas, Phil


Rowlands, Ted
Worthington, Tony


Roy, Frank
Wright, Anthony D (Gt Yarmouth)


Ruane, Chris
Wright, Dr Tony (Cannock)


Ruddock, Joan



Russell, Ms Christine (Chester)
Tellers for the Noes:


Ryan, Ms Joan
Mr. David Hanson and


Salter, Martin
Jane Kennedy.

Question accordingly negatived.

MR. DEPUTY SPEAKER then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

Schedule 3

CRIMINAL DEFENCE SERVICE: RIGHT TO REPRESENTATION

Amendments made: No. 45, in page 69, line 39, leave out first 'of and insert 'to'.

No. 46, in page 69, line 42, leave out first 'of' and insert 'to'.

No. 47, in page 70, line 3, leave out first 'of' and insert 'to'.

No. 48, in page 70, line 5, leave out first 'of' and insert 'to'.

No. 49, in page 70, line 6, leave out 'before a court'.

No. 50, in page 70, line 10, leave out first 'of' and insert 'to'.

No. 51, in page 70, line 13, leave out third 'of' and insert 'to'.

No. 52, in page 70, line 16, leave out 'the' and insert 'any'.

No. 53, in page 70, line 18, at end insert—
'(6) The powers of a magistrates' court for any area under this paragraph may be exercised by a single justice of the peace for the area.
(7) Any rules under section 144 of the Magistrates' Courts Act 1980 which provide for the functions of a single justice under subparagraph (6) to be exercised by a justices' clerk may make different provision for different areas.'.

No. 54, in page 70, line 21, leave out first 'of and insert 'to'.

No. 55, in page 70, line 22, leave out 'of' and insert 'to'.

No. 56, in page 70, line 24, leave out third 'of' and insert 'to'.

No. 57, in page 70, line 31, leave out 'of and insert 'to'.

No. 58, in page 70, line 32, leave out 'of' and insert 'to'.

No. 59, in page 70, line 34, leave out 'of and insert 'to'.

No. 60, in page 71, line 3, leave out 'of' and insert 'to'.—[Mr. Hill.]

Schedule 4

AMENDMENTS CONSEQUENTIAL ON PART I

Amendments made: No. 61, in page 71, line 16, at end insert—

The Criminal Appeal Act 1968 (c.19)

.In section 50 of the Criminal Appeal Act 1968 (meaning of "sentence"), at the end insert—
(3) An order under section 17 of the Access to Justice Act 1999 is not a sentence for the purposes of this Act.".'.

No. 62, in page 71, line 23, leave out 'of' and insert 'to'.

No. 63, in page 71, line 33, leave out 'of' and insert 'to'.

No. 64, in page 71, line 42, leave out 'of' and insert 'to'.

No. 65, in page 72, line 11, leave out 'of' and insert 'to'.

No. 66, in page 73, line 40, at end insert—
'. The Supreme Court Act 1981 has effect subject to the following amendments.
.In section 28 (appeal by way of case stated from decisions of Crown Court, other than those relating to trial on indictment), at the end insert—
(4) In subsection (2)(a), the reference to a decision of the Crown Court relating to trial on indictment does not include a decision relating to an order under section 17 of the Access to Justice Act 1999.
. In section 29 (judicial review of decisions of Crown Court, other than matters relating to trial on indictment), at the end insert—
(6) In subsection (3), the reference to the Crown Court's jurisdiction in matters relating to trial on indictment does not include its jurisdiction relating to orders under section 17 of the Access to Justice Act 1999.".'.

No. 67, in page 73, line 41, leave out

'of the Supreme Court Act 1981'.

No. 68, in page 74, line 5, leave out 'of' and insert 'to'.

No. 69, in page 77, line 22, at end insert—

The Crime and Disorder Act 1998 (c.37)

. The Crime and Disorder Act 1998 has effect subject to the following amendments.

. In section 50(2) (procedure at early administrative hearing), for paragraphs (a) to (c) substitute "the accused shall be asked whether he wishes to be granted a right to representation funded by the Legal Services Commission as part of the Criminal Defence Service and, if he does, the justice shall decide whether or not to grant him such a right."

. In paragraph 3(8) of Schedule 3 (matters which may be contained in a report of an application for dismissal of charges), for paragraph (g) substitute—
(g) whether a right to representation funded by the Legal Services Commission as part of the Criminal Defence Service was granted to the accused or any of the accused.

The Disability Rights Commission Act 1999

. In section 8(4)(a) of the Disability Rights Commission Act 1999 (charges to recover costs of assistance in legal proceedings subject to any charge for benefit of Legal Aid Board), for the words from "under" to "Board" substitute "imposed by section 10(7) of the Access to Justice Act 1999 and any provision in, or made under, Part I of that Act for the payment of any sum to the Legal Services Commission".'.—[Mr. Hill.]

New Clause 8

POWERS OF OMBUDSMAN

'.—(1) Section 23 of the Courts and Legal Services Act 1990 (recommendations of the Legal Services Ombudsman) is amended as follows.

(2) In subsection (1)(c) (written report of investigation to be sent to person with respect to whom recommendation is made), after "subsection (2)" insert "or an order under subsection (2A)".

(3) In paragraph (e) of subsection (2) (recommendation that costs be paid by person or body to which recommendation under paragraph (c) or (d) applies), for "which a recommendation under paragraph (c) or (d) applies" substitute "pay compensation under paragraph (c) or (d)".

(4) After that subsection insert—
(2A) If after completing any investigation under this Act the Ombudsman considers that, rather than recommending the taking of any action by any person or professional body under paragraph (c), (d) or (e) of subsection (2), he should make an

order requiring the taking of that action by the person or body—

(a) he shall afford the person or body, and the person who made the allegation, a reasonable opportunity of appearing before him to make representations; and
(b) having considered any representations from them, he may, in reporting his conclusions, make the order."

(5) In subsections (3) and (4) (reports), after "recommendation" (in each place) insert "or order".

(6) In subsection (6) (duty to have regard to Ombudsman's report), for "subsection (1)(b) or (c)" substitute "subsection (1)(b), (c) or (d)".

(7) For the sidenote substitute "Recommendations and orders.".'.—[Mr. Vaz.]

Brought up, and read the First time.

Mr. Vaz: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following amendments:
Government new clause 9—Funding of Ombudsman by professional bodies
Government new clause 10—The Commissioner
Government new clause 11—Commissioner's functions.
Government new schedule 1—Legal services complaints commissioner
Government amendment No. 86.

Mr. Vaz: The Government have tabled four new clauses and a new schedule to amend the powers of the legal services ombudsman, and to establish a new post of legal services complaints commissioner. New clause 8 will amend section 23 of the Courts and Legal Services Act 1990, which established the office of the legal services ombudsman. The ombudsman currently oversees the handling of complaints against solicitors, barristers, legal executives and licensed conveyancers by the professional bodies responsible for setting and maintaining standards of conduct and service within the legal professions.
The 1990 Act allows for new bodies to come within its remit by order of the Lord Chancellor—for example, when new bodies are authorised to grant rights of audience or rights to conduct litigation to their members. The ombudsman can investigate allegations about the way in which a professional body has handled a complaint against one of its members. Section 23 of the 1990 Act sets out what the ombudsman's powers are once an investigation has been completed. These include, in subsection (2), making recommendations to the person complained about, or to the relevant professional body, or to both. Those recommendations can include the payment of compensation to the complainant, and payment to cover the costs of making the allegation.
Under the current legislation, the ombudsman can make recommendations to a person or professional body only about the action that should be taken. The recommendations are not enforceable. That has not caused a problem with the professional bodies hitherto: in every case since the ombudsman scheme began in 1991, the professional bodies have complied with the ombudsman's recommendations. There are, however, a few cases each year where lawyers have refused to accept such a recommendation.
9 pm
Under the current legislation, the ombudsman has very little power to take the matter further. She can only publicise the fact that a recommendation has not been followed—usually by taking out an advertisement in a local newspaper—and then recover from the person involved the costs that she has expended.
The new clause will allow the ombudsman to make a binding order in cases in which she considers that appropriate, which will be enforceable through the courts. Before such a binding determination was made, however, the person or professional body would be entitled to appear before the ombudsman to make representations about the decision.
This extension to the ombudsman's powers will be a welcome addition to her armoury of powers to tackle those who are not providing an adequate service to their clients. It should assist clients in recovering compensation that is due to them and which they would not otherwise receive. The ombudsman will not be obliged to use the powers, but the reserve power will be of value in appropriate cases. The current ombudsman, Ann Abraham, does an excellent job, and I pay tribute to her. I am sure that the extra powers will enable her to carry out her duties even more effectively in future.
The clause also makes a minor amendment to section 23, so that the professional bodies have a duty to have regard to the conclusions and recommendations made by the ombudsman in reports. There was an error in the original drafting of section 23(6). In reality that was not a problem, as the professional bodies have always complied with the ombudsman's recommendations, but it is right to take this opportunity to clarify the legislation.
I shall deal briefly with amendment No. 86, which repeals references in the Courts and Legal Services Act 1990 to consent of the Treasury being required when the Lord Chancellor determines the amount of pay and pensions for the ombudsman and her staff. That is in line with current Treasury policy.
New clause 9 inserts a new sub-paragraph into schedule 3 to the Courts and Legal Services Act 1990. The schedule deals with, among other things, the remuneration, staffing and financial provisions of the office of the legal services ombudsman. The purpose of the new clause is to give the Lord Chancellor the power to require any professional body to make payments to the legal services ombudsman in respect of any of the expenses of the ombudsman. I remind the House that the current relevant professional bodies are the Bar Council, the Law Society, the Institute of Legal Executives and the Council for Licensed Conveyancers.
The Government do not intend to use this power unless the Lord Chancellor appoints the legal services complaints commissioner; I will speak about that post in detail later. The commissioner will not be appointed unless and until the professional bodies are seen not to be making progress with their complaints systems. It is only right that if the commissioner is appointed, and therefore the professional bodies are failing, they should be required to contribute towards the body that oversees complaints handling. The practice elsewhere is for ombudsman schemes to be financed directly by the professions concerned.
However, I reiterate that the Government would not use this power unless and until a commissioner were appointed, and then only for those bodies that were

subject to his remit. If any professional body were liable to make payments in this regard, those payments would, of course, be proportionate to the size of the body and the number and nature of the complaints generated. The Lord Chancellor will have similar powers to require payments from the professional bodies to fund the commissioner.
New clause 10 gives the Lord Chancellor power to appoint a legal services complaints commissioner. That is, in part, in response to hon. Members who have been pressing the Government for some time to intervene in the handling of complaints about the legal professions, in particular the Office for the Supervision of Solicitors. My predecessor and I have received many complaints including those from my right hon. Friend the Secretary of State for Culture, Media and Sport; the right hon. Member for South?West Surrey (Mrs. Bottomley); the hon. Member for South Dorset (Mr. Bruce); my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), and the hon. Member for Southend, West (Mr. Amess). I should point out, however, that the commissioner will not be brought into being by the passing of the Bill. The clause simply gives the Lord Chancellor the power to set up the post, if and when it is necessary. I will explain the reasons for this later.
The commissioner will have powers to intervene effectively to improve standards of complaints handling by the legal professional bodies. New clause 11—in particular, subsection (2)—sets out in detail the functions and the powers of the commissioner. In addition to the investigatory powers specified in subsections (2)(a) and (2)(b), the commissioner will have powers to make recommendations about the arrangements for the handling of complaints and any aspect of complaints handling. The commissioner will also have powers to impose targets on the authorised bodies for the handling of complaints. Those targets could include the timeliness of the handling of complaints; customer perceptions of the complaints system; and perhaps targets for training lawyers in complaints handling.
Subsection (2)(e) gives the commissioner power to require a professional body to produce a plan setting out how it intends to improve its complaints handling performance to meet such targets. If a professional body fails to submit such a plan when required to do so by the commissioner, or, having submitted such a plan, it fails to handle complaints in accordance with it, subsection (3) gives the commissioner the power to levy fines on that body.
Subsection (4) provides that, where the commissioner requires a professional body to pay a penalty, he shall afford the body a reasonable opportunity of appearing before him to make representations. It will be for the House to decide, if and when the commissioner is set up, what the penalty should be.
The new post will be financed by a levy on the authorised bodies. I will set out the background which I believe justifies these measures. The provisions on the legal services complaints commissioner will, however, come into force only if it appears to the Lord Chancellor that complaints about members of any professional body are not being handled effectively and efficiently. The Lord Chancellor would use those powers only after a great deal of thought and with a great deal of reluctance. We have not spelt out in the legislation precisely the circumstances in which the Lord Chancellor might use those powers. It is impossible to predict all the circumstances in which the


public interest might be best served by using these powers. But the professional bodies will, rightly, wish to know what performance is expected of them.
First, I can assure the House that the Lord Chancellor has no plans to use these powers within 18 months of Royal Assent. In particular, he will want to see the annual report of the Office for the Supervision of Solicitors for the calendar year 2000 in spring 2001. These are reserve powers and we wish to give the OSS in particular the opportunity to put its house in order. I shall shortly be seeing the director of the OSS. I know that the Law Society recently published a report from Ernst and Young which set out a blueprint for a more efficient system of dealing with complaints against solicitors.
Secondly, we intend to tell the professional bodies about the sort of performance that would ensure that the Government will not use these powers. We will meet representatives of the Law Society and the other professional bodies during the next few months to find out how they view their present performance and what improvements might reasonably be expected. In the light of those consultations, the Government will give their view on what performance would persuade the Lord Chancellor not to use his powers.
These consultations will principally concern the Law Society, which is by far the largest professional body and which generates by far the largest volume of complaints. But we will also consult the Bar Council, the Institute of Legal Executives and the Council for Licensed Conveyancers, to whom the legislation equally applies. We will involve the legal services ombudsman in this process because of her considerable knowledge of complaints procedures and the professional bodies' performance.
It may be helpful if I explain the background to our proposal to take those powers. The OSS, which is an integral part of the Law Society and which has been set up to deal with complaints of inadequate professional service and complaints of misconduct against solicitors, is at present failing to deal adequately with complaints of inadequate professional service. There is a backlog of 9,000 complaints, and it is increasing.
Complaints are not allocated to a case officer for six months. The OSS is the most recent attempt by the Law Society to get its complaints systems right. Like the previous attempts—most notably, the Solicitors Complaints Bureau—it has not been seen to deliver any sustained improvement and there is a good deal of public concern. As I said earlier, certain members of the House are well aware of that and have written to me on behalf of constituents who are extremely concerned by their dealings with OSS. Indeed, the matter has been raised on the Floor of the House at Question Time.
There are arguments that the Government should put the regulation of the legal professions on a statutory basis, perhaps similar to that of the Financial Services Authority or the Immigration Services Commissioner proposed in the Immigration and Asylum Bill. The Government do not accept that argument. Self-regulation remains the best option for the legal professions, whose members must at times oppose the Government strenuously in pursuit of citizens' rights.
Nevertheless, there is a public interest in the efficient handling of complaints by the legal professional bodies. That is why the independent legal services ombudsman was set up by the Courts and Legal Services Act 1990. Although the ombudsman can and does make general recommendations to the legal professional bodies on their complaints handling arrangements, the office exists principally to ensure that individual complaints are effectively dealt with. Its primary remit is to examine and adjudicate on appeals by dissatisfied complainants from the complaints mechanisms of the legal professional bodies. That arrangement is no longer enough. That is why we are introducing legislation to make provision for the new body.
There are signs that the Law Society wants to put its own house in order. A new scheme for the handling of complaints has been put together by the OSS. The Law Society has also recently increased the budget for the OSS. We are not proposing to appoint a commissioner, and therefore bring those powers into force, unless and until an authorised body is clearly failing to make substantial progress in improving its complaints record. We believe those proposals will encourage the Law Society to ensure that the profession makes real improvements in complaints handling.
Turning to the detail of the new clause, our view is that, in practice, the new post, if it is necessary to bring it into force, is likely to be held by the person holding the office of the legal services ombudsman, because the commissioner's role overlaps with some functions of the ombudsman. For that reason, the legislation mirrors the provisions in the 1990 Act relating to the appointment of the ombudsman.
As in the 1990 Act, the proposed legislation provides for the commissioner to be appointed for not more than three years, in accordance with the Nolan guidelines. The commissioner shall be eligible for reappointment on conclusion of that term. As in the 1990 Act, the commissioner may not be a member of the legal profession so that the public can be assured of the impartiality of the postholder. The new clause also gives effect to a new schedule, which makes further provision about practical arrangements of the commissioner's office.
Hon. Members may be concerned that we have introduced these powers to the Bill at a relatively late stage; that is why I have explained the proposals in details. My justification for doing so is that the deterioration in the performance of the OSS has become far more marked recently, and it has recently become clear that the legal services ombudsman will signal to the Lord Chancellor in her annual report at the end of this month that the OSS has not made sufficient progress.
In my view, it would be wrong not to act immediately because we have a clearly appropriate legislative vehicle. The new powers will help to achieve better performance in the handling of complaints, which I know is the aim of the Law Society and the other professional bodies. They are proportionate, appropriate and timely and will be welcomed by the Members of the House and the public at large.

Mr. Garnier: As the Minister said so disarmingly and candidly a moment ago, the new proposals are late, and have been submitted to the public gaze only over the past


10 days or so. I acquit the Minister of presenting them late, because he joined the Department only recently. Moreover, he was courteous enough to invite my hon. Friend the Member for Surrey Heath (Mr. Hawkins), the hon. Member for Torridge and West Devon (Mr. Burnett) and me to his office last week so that we could go through some of the new clauses and amendments that the Government were proposing to table.
9.15 pm
Having acquitted the Minister, however, I cannot acquit the Government of not having come to the aid of the public before now. I am not at all convinced that enough has changed between December—when the Bill was introduced in the other place—and now to make the Government's delay acceptable. It is fair to say that the Minister's predecessor trailed on Second Reading decisions about the Office for the Supervision of Solicitors but I am not persuaded that enough has happened since then to allow for such a delay.
It is fortunate that new clauses 8, 9, 10 and 11 are largely uncontroversial. None the less, it is the duty of an Opposition, and certainly the duty of the House as a whole, to examine carefully amendments to Government legislation that are tabled so late. I therefore propose to take a little look at the new clauses.
I listened carefully to what the Minister said about new clause 8. I understand that it gives the legal services ombudsman power to make binding decisions, rather than merely recommending that individual lawyers or professional bodies take particular action.
Although the ombudsman does not at present have power to order solicitors—or other lawyers—or their professional bodies to pay compensation to clients, the ombudsman does have power to require them to place advertisements, at their own expense, publicising the ombudsman's decision. I understand from solicitors that that is an unreal and unsatisfactory situation, and that it would be far more straightforward, and more useful to the lay client concerned, for the ombudsman to have direct power to make binding orders, rather than simply having a power to embarrass the lawyer or professional body.
The Minister said that the situation at the OSS had changed—had deteriorated—since the Bill first came to public notice. I could probably count on the fingers of one hand the number of complaints that I have received in my constituency about the quality of service provided by solicitors since becoming a Member of Parliament in April 1992.

Mr. Andrew Dismore: That is not my experience.

Mr. Garnier: I appreciate that others may have had different experiences. The hon. Member for Dismore—[Interruption.] Perhaps I should call him Mr. Hendon. Anyway, the hon. Member for Hendon (Mr. Dismore) has clearly had a wholly different experience. Last week, he and I were at a meeting with the director of the OSS, Mr. Peter Ross, at which the hon. Gentleman painted a picture very different from the one that I knew. It was clear that my experience during seven or eight years here differed greatly from his during the two or three years since his election.
I appreciate that different Members of Parliament will tell different stories. What I ask the Minister is this: what is his evidence—actual evidence, as opposed to simple assertion—that the position changed so dramatically between the beginning of the year and now that it was appropriate to table the new clauses last week?
New clause 9 is intended to enable the Lord Chancellor to require any professional body to make payments towards the cost of meeting the functions of the ombudsman. At present, those functions are funded by moneys provided by Parliament.
The purpose of new clause 9 is to enable the Lord Chancellor to recover from the professional bodies concerned the costs of operating the new functions proposed for the legal services complaints commissioner should it be decided to make such an appointment. The provision for a legal services complaints commissioner and his or her functions are, as the Minister explained, stated in new clauses 10 and 11.
The Opposition say that it is important that the Bill should make it clear that the power to recover costs is intended to apply only to the new functions. At the very least, it is important that the Government should state their plans for the operation of new clause 9. In any case there is some doubt about the appropriateness of the new clause.
Does the Minister agree that meeting the costs of the ombudsman and of the proposed complaints commissioner—I agree that there is some debate on whether the same human being should fill both posts, or whether the posts should be filled by two people—out of moneys provided by Parliament, rather than by levying the professional associations, would help to reinforce the independence of the two offices? Recovering costs from the professional bodies would—or at least could—give rise to the public perception that the ombudsman was not wholly independent of them.
Some people argue that making the professional bodies pay towards the ombudsman's costs would be consistent with the approach taken in other spheres—for example, in the case of the insurance ombudsman. However, that is a false analogy. The insurance ombudsman is the first tier for complaints about individual insurance companies, and the same applies to other ombudsmen in the financial services sector.
The professions already meet the full costs of first-tier complaints. In the case of the Law Society, the profession spends more than £11 million annually on the Office for the Supervision of Solicitors. The legal services ombudsman is a second-tier structure, designed to provide additional public assurance about the operation of the profession's complaints-handling mechanism. It is far more appropriate for such a scheme to be paid for from moneys provided by Parliament than for it to be funded by the professional bodies. I trust that the Minister will be able to help me in addressing my concerns on that issue.
New clause 11 would enable the Lord Chancellor to ask the legal services complaints commissioner to exercise new powers concerning professional bodies. The powers would include setting targets on the handling of complaints, and requiring professional bodies to pay a penalty when they failed to handle complaints effectively.
I understand the argument that it is in the public interest that there should be some means of ensuring that the ways in which the professional bodies handle complaints meet reasonable public needs. There is, indeed, a strong case


for providing similar assurances for some of the services that the Government themselves provide directly to the public. I also recognise that the concern underlying new clause 11 has arisen primarily from the difficulty that the OSS has encountered in keeping pace with its increased work load.
As I said, the Law Society already spends £11.6 million annually—about £150 for every practising solicitor—on the OSS. As the Minister said, last February, the Law Society commissioned Ernst and Young, the management consultants, to undertake a review of the OSS's work and to suggest ways forward. The review has now been completed, and paints a very clear picture of how a more effective and efficient complaints-handling system could be achieved. The hon. Member for Hendon and I discussed that matter at our meeting with the director of the OSS.
Later this week, as a first step, the council of the Law Society will be asked to approve a further £5.7 million of expenditure that is designed to enable the OSS to get on top of its work load.
Paradoxically, the increased volume of complaints at the OSS comes at a time when the standard of client care provided by the profession as a whole has—I think indisputably—been steadily improving. Solicitors generally take far more care than they did a few years ago to ensure that clients are aware of likely costs at the outset, and that they are informed of progress on their matter. A whole new culture seems to have developed around the way in which legal advisers, both at the Bar and in the solicitors' profession, treat their clients, and that is much to be welcomed.
Nevertheless, complaints—and the costs of dealing with them—have risen, for two main reasons: increased client expectations about the type of service that they can expect from solicitors; and much-improved information from solicitors about clients' avenues of complaint.
The Law Society tells me that it recognises that there is still some way to go in bringing all solicitors up to the level of the majority in their dealings with their clients. Another matter that came out at the meeting that the hon. Member for Hendon and I attended last week was that we are talking about a small minority of rotten apples in what is otherwise a well-regulated and well-conducted profession. I notice that the hon. Member for Hastings and Rye (Mr. Foster) is here. He was also at the meeting, and I hope that he will be able to confirm what I say. That small number of malefactors brings not just solicitors but the whole legal profession into disrepute. I understand the public's concerns and the need for the Government to do something to assuage them.
The Law Society's continuing efforts in education, together with ensuring that appropriate penalties are imposed on those who let the profession down, are the way forward. Dealing with complaints more efficiently requires effort to reduce the number of complaints and to ensure appropriate prioritisation among those that need to be dealt with. Improved client care, including complaints handling by individual solicitors, can reduce the burden on the OSS. The legal profession should deal with complaints early and follow the example of the three major acute hospitals that serve the Minister's constituency and mine by persuading the complaining

client or a member of their family that there are two sides to the argument and that it is possible to admit a mistake without admitting legal liability. The way in which a complaint is initially handled can often save a lot of time and money. I trust that solicitors and barristers will increasingly take a more conciliatory attitude towards those who complain about them and that the somewhat draconian measures that the Government are proposing may not need to be implemented.
The new clause provides for a penalty to be imposed on professional bodies if they fail to provide a satisfactory plan or to deal with complaints in accordance with it. I am instructed by the Law Society that it doubts whether that is appropriate. In any event, the Bill should specify the penalty that might be imposed. I use the term "instructed" because it slips easily from my lips. In my day job, to which I admitted at the start of our debates, I have the advantage—whether my clients consider it such is another matter—of being instructed by solicitors. It simply means that I am provided with information by them. The Law Society has told me about the concern that I am raising. It is only right that the House should take that into account when considering the new clauses. The Minister may be able to give us some help on those concerns.
I do not intend to debate new schedule 1 or amendment No. 86 and I do not invite the House to disagree with the proposals. However, I chide the Government, if not the Minister, for taking until June 1999 to come up with wording for new clauses which, with a little industry, could have been in the Bill when it was published, or at least introduced in Committee.

Mr. Kidney: I shall not detain the House for long. I congratulate my hon. Friend the Minister on his position and wish him a long and distinguished career in government. I also declare a slight interest as a non-practising solicitor, as mentioned in the Register of Members' Interests.
I welcome the new clauses. The hon. and learned Member for Harborough (Mr. Gander) mentioned last week's meeting with the director of the Office for the Supervision of Solicitors. I was there too, so I know that it was a very cosy meeting. The hon. and learned Gentleman asked for evidence to support the late tabling of the amendments and asked why they could not have been drafted earlier.
It is certainly a breaking story that the Law Society is proving unable to deal with the number of complaints that are made against professionals. We must first go back to the OSS report for the 16 months to the end of December last year. It shows the staggering fact that just over 75,000 solicitors generated more than 44,000 new matters for the OSS to deal with. At the time of the Standing Committee, we heard the rumour that the ombudsman's report this year would say that the OSS was not coping with the present level of new complaints. This week sees the publication of the Ernst and Young report that was commissioned by the Law Society, which paints the chilling picture that the OSS is receiving more new complaints than it is resolving old ones, so there is a great crisis in the handling of complaints.
I have personal experience in my constituency of the dissatisfied complainant. Although there are not huge numbers of complaints about solicitors in Stafford, we certainly have a persistent complainant who showed me an example of very poor complaint handling by the predecessor of the OSS and the previous ombudsman.
It is important to give members of the public—that is who the complainants are—confidence in solicitors as a profession. They must feel that complaints are dealt with properly and that the Law Society is accountable for dealing with them.
Some of my hon. Friends have tabled an early-day motion in which they seek statutory regulation of the legal profession. They say that there is too great a conflict of interests for the Law Society to deal with complaints. I do not share their view that the Law Society is in some way collaborating with the OSS to support solicitors and do down complainants. In fact, the Ernst and Young report shows that the Law Society has walked away from the OSS, taking its guarantee of independence far too strongly and leaving it to its own devices and unable to cope with the demand on its services. If there is a criticism to be made of the Law Society, it is that it has taken too little interest in, and under-resourced, the OSS.
I welcome the threat that the new clauses present to the Law Society—telling it to put in order complaints against solicitors. As the hon. and learned Member for Harborough said, a small minority of solicitors are producing a large number of complaints. The Ernst and Young report talks of 1 per cent. of all solicitors producing 10 per cent. of complaints. If that is what it takes, there should be a sword of Damocles hanging over solicitors—that they will pay a penalty for failing to deal with complaints and will pay for the commissioner coming in to impose a system for dealing with complaints in a timely manner.
I congratulate my hon. Friend the Minister on introducing the new clauses. I hope that members of the Law Society will recognise that they are certainly in the last chance saloon. This is their last opportunity to clean up their act and deal with complaints in the way that we and every member of the public would expect them to.

Mr. Vaz: Having wished me a long and distinguished ministerial career, my hon. Friend the Member for Stafford (Mr. Kidney) has made me redundant. He eloquently put the case that I intended to make, so I really do not have to speak for very long. Having said that, in parliamentary terms that means that I will speak for just a little longer.
Things are getting worse. The backlog is now 9,000, it takes six months to allocate a case, and new cases are arising at the rate of 90 a week. It is right that, in the first instance, we should leave it to the Law Society and the professional bodies to regulate themselves. The Government are sometimes accused, unfairly, by the hon. and learned Member for Harborough (Mr. Garnier) of seeking to take too many powers. The point is that we are not exercising this power because we believe that the Law Society ought to be left to put its own house in order. That is why we welcome the Ernst and Young report, which points a way for the Law Society. There is a commitment for the Law Society to spend an additional £5.7 million on this issue.
I appear to be the only person involved in the debate who was not at the meeting with Mr. Peter Ross. I feel left out and neglected. I say to the hon. and learned

Member for Harborough that he has done his bit in trying to publicise the work of the OSS. He was the host at the launch by the Office for the Supervision of Solicitors of a new hotline for Members of Parliament to ring, and he has been tenacious in his desire to ensure that these matters are publicised.
We can help members of the public by making sure that they know how to make their complaints. The commissioner—if he or she is appointed—will seek to help firms of solicitors put in place appropriate methods of handling complaints. Like the hon. and learned Member for Harborough, I have not had many constituents complaining to me about solicitors. I think that they go to other agencies to do that. However, they must be complaining to somebody, otherwise there would not be a backlog of 9,000. We are leaving the matter up to the Law Society. We are asking it to read the Ernst and Young report, which it commissioned, and to act on it. We want to work with the Law Society, and we will not compel it to do anything until we know what is happening. That is the right way forward.
It is right that the professional bodies should pay. They do not have to pay now, and they will not have to pay until the scheme is brought into effect. However, there are precedents for ombudsmen being paid for by those they seek to regulate. It is right that they should be in that position because they are the professional body dealing with those matters. They have a unique opportunity.
My hon. Friend the Member for Stafford talked about drinking at the last chance saloon. I am a teetotaller, and I do not indulge in such activities. However, the Government want the Law Society to succeed. We desperately want the Law Society to make this work—for itself, for the reputation of our profession and for the public at large. We will give the Law Society the opportunity to succeed. If it wants us to help, it should come and talk to us. That is why I will see Mr. Ross in the near future. His role is important in trying to make sure that the problem is solved.
As my hon. Friend the Member for Stafford said, we are doing this now because the report of the ombudsman is coming out soon. Frankly, this is an appropriate legislative vehicle. We cannot just magic out of Committee a new Bill to deal with one specific issue. This is an opportunity. The Lord Chancellor, who is a listening Lord Chancellor, has decided that he will not take the power now. There is to be an 18-month wait, and we will see how it goes. Matters will then be reported back to the House in the appropriate way.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 9

FUNDING OF OMBUDSMAN BY PROFESSIONAL BODIES

'. In paragraph 7 of Schedule 3 to the Courts and Legal Services Act 1990 (financial provisions relating to Legal Services Ombudsman), for sub-paragraph (1) (Ombudsman's expenses to be defrayed by Lord Chancellor) substitute—
(1) The Lord Chancellor may require any professional body (within the meaning of section 22 of this Act) to make payments of such amount as the Lord Chancellor considers appropriate to the Ombudsman towards meeting the expenditure incurred (or to be incurred) by him in the discharge of his functions.


(1A) To the extent that that expenditure is not met by payments under sub-paragraph (1), it shall be met by the Lord Chancellor out of money provided by Parliament.".'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 10

THE COMMISSIONER

'.—(1) The Lord Chancellor may appoint a person as Legal Services Complaints Commissioner.

(2) Any appointment of a person as Commissioner shall be for a period of not more than three years; and a person appointed as Commissioner shall hold and vacate office in accordance with the terms of his appointment.

(3) At the end of his term of appointment the Commissioner shall be eligible for re-appointment.

(4) The Commissioner shall not be an authorised advocate, authorised litigator, licensed conveyancer or authorised practitioner (within the meaning of the Courts and Legal Services Act 1990) or a notary.

(5) Schedule (Legal Services Complaints Commissioner) (which makes further provision about the Commissioner) has effect.'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 11

COMMISSIONER'S FUNCTIONS

'.—(1) If it appears to the Lord Chancellor that complaints about members of any professional body are not being handled effectively and efficiently, he may by direction require the Legal Services Complaints Commissioner to consider exercising in relation to the body such of the powers in subsection (2) as are specified in the direction.

(2) Those powers are—

(a) to require a professional body to provide information, or make reports, to the Commissioner about the handling of complaints about its members,
(b) to investigate the handling of complaints about the members of a professional body,
(c) to make recommendations in relation to the handling of complaints about the members of a professional body,
(d) to set targets in relation to the handling of complaints about the members of a professional body, and
(e) to require a professional body to submit to the Commissioner a plan for the handling of complaints about its members.

(3) Where the Commissioner requires a professional body to submit to him a plan for the handling of complaints about its members but the body—

(a) fails to submit to him a plan which he considers adequate for securing that such complaints are handled effectively and efficiently, or
(b) submits to him such a plan but fails to handle complaints in accordance with it,
he may require the body to pay a penalty.

(4) Before requiring a professional body to pay a penalty under subsection (3) the Commissioner shall afford it a reasonable opportunity of appearing before him to make representations.

(5) The Lord Chancellor shall by order made by statutory instrument specify the maximum amount of any penalty under subsection (3).

(6) In determining the amount of any penalty which a professional body is to be required to pay under subsection (3) the Commissioner shall have regard to all the circumstances of the case, including in particular—

(a) the total number of complaints about members of the body and, where the penalty is imposed in respect of a failure to handle complaints in accordance with a plan, the number of complaints not so handled, and
(b) the assets of the body and the number of its members.

(7) A penalty under subsection (3) shall be paid to the Commissioner who shall pay it to the Lord Chancellor.

(8) Where a direction under subsection (1) in relation to a professional body has been given (and not revoked), section 24(1) of the Courts and Legal Services Act 1990 (power of Legal Services Ombudsman to make recommendations about arrangements for investigation of complaints) shall not have effect in relation to the body.

(9) No order shall be made under subsection (5) unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.

(10) In this section "professional body" has the same meaning as in section 22 of the Courts and Legal Services Act 1990.'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 6

BAR PRACTISING CERTIFICATES

'.—(1) If the General Council of the Bar makes rules prohibiting barristers from practising as specified in the rules unless authorised by a certificate issued by the Council (a "practising certificate"), the rules may include provision requiring the payment of fees to the Council by applicants for practising certificates.

(2) Rules made by virtue of subsection (1)—

(a) may provide for the payment of different fees by different descriptions of applicants, but
(b) may not set fees with a view to raising a total amount in excess of that applied by the Council for the purposes of the regulation, education and training of barristers and those wishing to become barristers.

(3) The Lord Chancellor may by order made by statutory instrument—

(a) amend subsection (2)(b) by adding to the purposes referred to in it such other purposes as the Lord Chancellor considers appropriate, or
(b) vary or revoke an order under paragraph (a).

(4) No order shall be made under subsection (3) unless—

(a) the Lord Chancellor has consulted the Council, and
(b) a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.

(5) No provision included in rules by virtue of subsection (1), and no other provision of rules made by the Council about practising certificates, shall have effect unless approved by the Lord Chancellor.

(6) The Council shall provide the Lord Chancellor with such information as he may reasonably require for deciding whether to approve any provision of rules made by the Council about practising certificates.'.—[Mr. Vaz.]

Brought up, and read the First time.

Mr. Vaz: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss Government new
clause 7—Fees for solicitor's practicing certificates.

Mr. Vaz: The new clauses relate to practising certificates for barristers and solicitors. Most solicitors are already required to hold practising certificates under the Solicitors Act 1974. The certificates, which are renewed annually, are evidence that the solicitor is properly qualified, and that he or she has abided by the various requirements placed on solicitors, such as having satisfactory insurance arrangements and having paid their dues to the Law Society.
New clause 6 enables the General Council of the Bar for the first time ever to require barristers to hold and pay for practising certificates on a similar basis. It also limits the purposes to which the Bar Council may apply the income that it receives from practising certificates, which will effectively be compulsory subscriptions.
The Law Society already has a statutory power to levy fees for practising certificates, but there is currently no statutory restriction on the society's use of its compulsory fee income. New clause 7 enables the Lord Chancellor to limit the purposes for which the Law Society may apply fee income from practising certificates.
The Government believe that it is right for a regulatory body to be able to charge compulsory fees to those whom it regulates. The Opposition tabled an amendment in another place that would have enabled the Bar Council to charge compulsory fees. That amendment was flawed, but my noble Friend the Lord Chancellor said that active consideration would be given to tabling a suitable amendment at a later stage.
The Bar Council carries out a regulatory function in relation to barristers, which is comparable to that exercised by the Law Society in relation to solicitors but, unlike the Law Society, the Bar Council has no statutory power to enforce the payment of subscription fees by its members. It is estimated by the Bar Council that 10 per cent. of practising barristers currently do not pay their subscription fees. The Government agree that it is unfair that some barristers should not contribute to the costs of the regulation from which all barristers benefit.
The new clause will also enable the Bar Council to require barristers to pay what amounts to a training levy to support pupil barristers or to provide other training. At present, many new barristers, after attending the Bar vocational course and being called to the Bar, are unable to obtain pupillages, and their careers fall at the first fence.
The Government hope that the Bar Council will choose to exercise its new power. It should be a potent means of ensuring more meritocratic entry to the Bar, which suffers from an excessively middle-class image. In short, it is not at present open to all the talents.
The Dearing review made it clear that individuals and professions should be expected to pay for such postgraduate vocational training. At present, neither the year in which the professional qualification is gained, nor the pupillage year, is grant aided. That operates as a powerful deterrent against entering the profession for people from ordinary backgrounds.

Mr. Grieve: I have no objection to the new clause, but I would not want it to go unsaid that, as the Bar currently operates, a large number of chambers supply substantial grants to their pupils to help them to complete their pupillage year.

Mr. Vaz: The hon. Gentleman is right to remind us that they do that, and it is not only wealthy personages who are able to come here and become barristers. Those training opportunities are very important. I believe that the funding would help to ensure for the future that more people not from privileged backgrounds are able to rise to success at the Bar.
On the detail of the clause, subsection (1) will enable the Bar Council to make rules requiring the payment of compulsory fees for practising certificates for those barristers who provide legal services to the public or to an employer. Subsection (2) provides that the rules on practising certificates may set different fee levels for different classes of barrister, for example according to whether they are employed, non-practising or in private practice or according to the length of time since they were called to the Bar. Subsection (2) also provides that the total amount of money generated from the payment of those fees should not exceed the Bar Council's total expenditure on the regulation, education and training of barristers and would-be barristers.
The Government have considered whether the total amount of fees from compulsory subscriptions should also be available for use on what might be described as the Bar Council's trade union activities. Our view is that they should not. The Government have no intention of creating a closed shop, requiring individual barristers to fund activities which they may not support and may, in fact, be contrary to their interests. Of course, it will be open to the Bar Council to raise money from barristers on a voluntary basis for those purposes, but the days of pre-entry closed shops are ended for trade unions and should not apply to other bodies either.
Nevertheless, the Government accept that there may be other purposes for which it would be appropriate for the Bar Council to use money generated from subscriptions. In considering that possibility, the Government would be guided by the wider public interest. Subsections (3) and (4) therefore enable the Lord Chancellor to add by order to the purposes in subsection (2). The order would be subject to prior consultation with the Bar Council and to affirmative resolution of each House of Parliament.
Subsection (5) requires that the Bar Council's rules on practising certificates be made with the concurrence of the Lord Chancellor who, under subsection (6), may, when deciding whether to approve such rules, request additional information from the Bar Council.
The chairman of the Bar Council, Dan Brennan, has welcomed the proposed introduction of new clause 6. His view is that the clause
safeguards the income that is essential to our work in regulating the profession in the public interest, and will protect the future of high calibre training and education for the Bar. It is appropriate in our view that all members of the Bar, who enjoy the benefits and services which the Bar Council provides, should pay their fair share of the cost incurred in providing these services.
I want to place on the record the Government's thanks to Dan Brennan and the Bar Council for all the work they have done to facilitate the formulation of this change.
On new clause 7, at present, under section 11(3) of the Solicitors Act 1974, fee income may be applied in any manner that the Law Society may think fit. In Committee, my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who is in his place, tabled an amendment that


sought to apply the same restrictions to the Law Society as the Government intend to apply to the Bar. That would have had the effect that practising certificate fees could be used only for the regulation, education and training of solicitors. A large number of other hon. Members expressed their support for the purpose of that amendment. In replying, my predecessor, the hon. Member for Ashfield (Mr. Hoon), said that there was a strong case for such a restriction, but that the Government needed to consider the position carefully before disturbing an arrangement that had been in place for many years.
The Government's initial view, which they conveyed to the Law Society, was that the restriction should be imposed in the same way as for the Bar Council. As I explained in relation to the new clause on Bar practising certificates, our belief is that it is right in principle to define how a professional body may spend money generated from compulsory subscriptions. The Government therefore support a restriction. I am aware that many solicitors would welcome such a move and feel that it would help to ensure that the Law Society remained answerable to the profession. Furthermore, there is a strong argument that the Law Society should be placed on an equal footing with the Bar Council.

Mr. Kidney: I was not one of the large number of hon. Members who expressed support for the new clause in Standing Committee. The new clause would limit what the Law Society could spend its members' money on. At its best, the legal profession is effective in its communication, fearless in its independence and passionate in its defence of liberty and democracy. If the Law Society used those skills in defence of an existing law that the Government wanted to change or to promote a law reform that the Government resisted to such an extent that it became embarrassing for the Government, will my hon. Friend assure me that that would not be a reason for the Government to exercise the power proposed in the new clause?

Mr. Vaz: My hon. Friend should wait to hear what I have to say, but I can assure him that we have thought very carefully about the matter. The challenge is as much for the Law Society as for any other organisation. There is no question of trying to prevent the Law Society from doing what it wants to do. However, it is right that it should put up a case for the way in which that income should be spent.
There was pressure on the Government to introduce the power in the new clause immediately, and that pressure was evident in the amendment tabled by my hon. Friend the Member for, Test. We did not do so, because we listened carefully to what the Law Society had to say. Indeed, my noble Friend the Lord Chancellor met the president of the Law Society, Mr. Michael Mathews, to discuss the Government's position. I was present at that meeting.
Mr. Mathews made some extremely important and useful points at the meeting, some of which related to what my hon. Friend the Member for Stafford said, and some of which have been incorporated in new clause 7. I want to thank Mr. Mathews for the cool, intelligent and thoughtful way in which he approached this issue and deployed his arguments.
As a result, the Government accept that immediate change could be disruptive and unhelpful. We have taken into consideration the full flexibility that the Law Society currently enjoys in the use of its income. The new clause therefore makes no immediate change to the position of the Law Society, but enables Parliament to decide what restriction might be appropriate when the Government—and the Law Society—have had time to consider the issues fully.
Indeed, that debate has started already. It is not for me to intrude on the Law Society's private arrangements, but candidates in the on-going presidential election have rightly started to debate this matter already, albeit in rather colourful language.
We have asked the Law Society to state, within the next 18 months, what activities it believes should be paid for out of compulsory fee income and what activities should be properly funded on a voluntary basis. Therefore, as I told my hon. Friend the Member for Stafford, the challenge is with the Law Society. The Government would be prepared to consider proposals that went beyond the regulation, education and training of solicitors if they were clearly in the public interest or had the overwhelming support of Law Society members. My noble Friend the Lord Chancellor would then be in a position to put fully considered proposals to Parliament.
It is perfectly possible that Parliament may decide to allow the Law Society to raise fees for a wider range of activities than is currently proposed for the Bar Council.

Mr. Grieve: In a sense, the Minister has already answered my question. A little while ago, he said that he was intending to put the Law Society on the same footing as the Bar Council. However, a comparison of the minutiae of new clauses 6 and 7 shows that that will not happen unless or until the order has been laid before Parliament.

Mr. Vaz: When the hon. Gentleman looks at Hansard tomorrow, he will see that I did not say that. I said that that was one of the options. He was too busy chatting to the hon. and learned Member for Harborough (Mr. Garnier) and the hon. Member for Surrey Heath (Mr. Hawkins) to give proper consideration to what I was saying. I said that the Government will be prepared to consider the proposals, which went beyond the regulation, education and training of solicitors, if that was clearly in the public interest and if the overwhelming majority of Law Society members favoured such a scheme. I added that it is perfectly possible that Parliament may decide to allow the Law Society to raise fees for a wider range of activities than is at present proposed for the Bar Council. The new clause on Bar practising certificates would enable Parliament to place the Bar's use of fees on the same basis, if that were considered to be the proper outcome.
Subsection (1) of new clause 7 enables the Lord Chancellor to make an order to amend section 11(3) of the Solicitors Act 1974 to restrict the purposes for which the Law Society may apply its fee income. That would leave the regulation, education and training of solicitors, and would-be solicitors, at an irreducible minimum. Subsection (1) would also enable the Lord Chancellor to add to those purposes other purposes that are considered appropriate.
Subsection (2) requires that any order made by the Lord Chancellor should be subject to prior consultation with the Law Society and the Master of the Rolls, and to approval by affirmative resolution of both Houses of


Parliament. I hope that the hon. Member for Beaconsfield (Mr. Grieve) and my hon. Friend the Member for Stafford (Mr. Kidney) are reassured that those processes will have to be completed before the matter is finally determined.
The Government cannot support a situation in which Law Society members are compelled to join a closed shop in order to practise. At the same time, we have no wish to stifle the many useful functions that the society currently performs in the public interest. The Government have listened to the Law Society's concerns and to the issues raised by hon. Members. The clause is an appropriate means of dealing with them and I commend it to the House.

Mr. Garnier: I shall be brief because the timetable motion requires the debate to finish by 10.15 pm. My brevity should not be taken as wholehearted support for what the Government are doing.
The chairman of the Bar may well have wanted new clause 6, but I suspect that he wanted it for reasons different from the Minister's. It would be interesting to compare the words of Mr. Daniel Brennan with those of the Minister to see whether they matched.

Mr. Vaz: They were his words.

Mr. Garnier: They were not only his words. I dare say that the Minister used some of Mr. Brennan's words, but he also used his own, or at least those of his civil servants, which he may have read for the first time this afternoon.
New clauses 6 and 7 cause me concern. New clause 7 seems to be a direct consequence of the Law Society's advertising campaign in March and April, when the Lord Chancellor was stung into conducting a rather ill-tempered debate on Radio 4's "Today" programme. He used fairly intemperate language either in a discussion with Mr. Mathews, the president of the Law Society, or shortly after Mr. Mathews had spoken on the radio.
New clause 7 is the result of pique. It has been produced by a Government and a Lord Chancellor who will brook no criticism. The Lord Chancellor is not prepared to have debated in public any matter of which he disapproves. He—like the Government—finds it uncomfortable to be disagreed with. New clause 7 is the result, introduced out of pique.

Mr. Vaz: The hon. and learned Gentleman is absolutely obsessed with the Lord Chancellor. I shall arrange a meeting for him so that he may see that the Lord Chancellor cares deeply for the professions. None of what the hon. and learned Gentleman has said about the Lord Chancellor fits my noble Friend. The hon. and learned Gentleman can take my word for it that new clause 7 has nothing to do with any Law Society advertising campaign.

10 pm

Mr. Garnier: I believe that the Minister believes that to be the case, but I do not accept that it is credible. No one who heard the Lord Chancellor, or saw his reactions to the advertising campaign, could marry up the arrival of new clause 7, or the threat of such a clause, with what the Minister says. I do not doubt his sincerity or that he believes what he has just told us, but he is being naive.
I have a further complaint about new clause 7, because it could amount to a denial of freedom of expression. Article 10 of the European convention on human rights, to which the Government attach so much importance that they passed the Human Rights Act 1998, allows freedom of expression. If solicitors, through their Law Society, wish to express themselves in a way that is antipathetic to the Government's policies, what right have the Government to intervene to stop them? That is the hidden agenda, if not the effect, of new clause 7, and it is much to be deprecated.
We are used, of course, to this Government bullying and arrogantly trying to wish their demands on the population. We are used to their ignoring Parliament and we have become used in discussing the Access to Justice Bill to them giving themselves and the Lord Chancellor huge executive powers through secondary legislation, some by negative and some by positive resolution. This coat-hanger Bill gives the Lord Chancellor huge executive powers. The new clause is yet another example, introduced at a late stage. It is reasonable to comment on the fact that we know that the motive for introducing it is quite different from what the Minister fondly believes. That is much to be deprecated. I shall not press it to a vote, bearing in mind the time, but it is right to signal our disapproval of how the Government go about such things, as evidenced by new clause 7.

Dr. Alan Whitehead: I join my hon. Friend the Member for Stafford (Mr. Kidney) in welcoming my hon. Friend the Minister to his new duties. I wish him a long and adventurous career in his new post. I also need to declare an indirect interest. I think that I am almost unique in the Chamber in not being a lawyer.

Mr. Martin Linton: No.

Dr. Whitehead: There is one other non-lawyer. However, my wife is a salaried local authority lawyer and does a very good job.
Far from giving rise to the concern expressed by the Opposition, new clause 7 results directly from new clause 22, which I tabled in Committee. I commend the Minister for putting into the new clause the principle that I advanced in Committee. As he pointed out, section 11(3) of the Solicitors Act 1974 states:
All fees received by the Society under subsection (1) shall be applied in such manner as the Society may think fit for the purposes of the Society".
Each year, that fee is charged for a practising certificate. The Law Society has the sanction of the law to charge it. Lawyers are required to pay it even if they do not join the Law Society, and the society can add various levies to it that are also enforceable by law. As far as I know, that is unique. No other professional society, trade union or organisation has such a power enforceable in law in the United Kingdom. I cannot believe that that is right.
I can believe that it is right and admirable that the Law Society charges a fee for the good work that it does. Everyone accepts that it does good work in setting professional standards, maintaining them, training the profession and, above all, regulating it. Those are wholly appropriate things for which to charge a fee, but the society should not have a power in law to do anything else that it wants to. It has been suggested that to say that


this unique position needs to be examined is somehow an attack on the raison d'être of the Law Society. That is nonsense. It is within the power of any society to levy a charge on its members for purposes for which it wishes to raise money. Indeed, I imagine that that is what, after discussion, the Law Society will do.

Mr. Dismore: We heard some talk earlier of the Law Society's anti-legal aid reform campaign. I am sure that my hon. Friend is aware that the Law Society is not the only trade union operating in the legal profession. I am a member of the GMB, which is recognised by a number of law firms. If the GMB had been so stupid as to try to run a similar campaign, it would have had to pay for it out of its political fund, which is the subject of a separate ballot of members, a right to opt out and a separate levy identified as part of the subscription.
Does my hon. Friend agree that it is peculiar that the Conservative party justifies the position of the Law Society under the present arrangements, bearing in mind the strong attitude that it took when in government to trade union political funds?

Dr. Whitehead: My hon. Friend makes a pertinent point that I do not now need to make. It is suggested that the Law Society has immunities, privileges and powers in law that are not available to trade unions and which have been the subject of extensive debate in the House. Yet restrictions on trade unions' powers in this respect were advocated by the Conservative party.
In summary, the reason why I tabled the proposal in Committee was to bring to the Government's attention the principle that the Law Society should not be above the law, as it were. The Law Society should be subject to the same conditions as are assumed to apply to other professional societies. I am glad that the Government have discussed that suggestion with the Law Society. I am pleased to hear that the Law Society has listened carefully to it and appears to be willing to discuss with the Government exactly how such changes might be made.
So the conclusion to the new clause is a happy one. Somewhat to my surprise, I have had a postbag containing letters from solicitors who think that this is a long overdue reform which puts right a wrong that they perceived to be inherent in the Solicitors Act 1974. Despite the protestations of various solicitors, I think that we will eventually achieve a method of regulation for both the Law Society and the Bar Council, which are similar; this anomaly will be rectified, and it will be done in a civilised and straightforward way. I congratulate my hon. Friend the Minister on putting the principle of what I suggested into a new clause and amendments which will work in the interests of all concerned in a way guaranteed to enhance the legal profession rather than to preserve indefensible anomalies.

Mr. Burnett: In view of the time, I shall make just a few points about new clause 7. It is deeply to be regretted that the Bill time and time again operates to arrogate more powers to the Lord Chancellor. Is there no area of the law that the Lord Chancellor does not seek to control and dominate? He is a prominent and powerful member of the Executive and the legislature, and he is the senior judge

in the land. He now seeks to undermine the independence of the Law Society, taking powers to take control of many of its affairs.
I have had the privilege of serving on the Law Society's revenue law committee for some 12 years. In opposition and in government, Labour Members have had every reason to be grateful to that specialist committee and to the other specialists committees of the Law Society, which do excellent work in the public interest. That is an example of one sphere of the work of the Law Society over which the Lord Chancellor wants to take control.
It is fundamental to the constitution of any free country that the legal profession be independent. Liberal Democrats strongly oppose new clause 7; it is a vindictive measure against the Law Society for, rightly—I stress, rightly—opposing the removal of legal aid for personal injury cases. The measure will save no money and will prejudice the poor and the vulnerable.

Mr. Vaz: Goodness gracious, Mr. Deputy Speaker. I do not know what has become of the hon. Member for Torridge and West Devon (Mr. Burnett). Where has he been? What has he been taking? There is no reason to get all worked up about this measure. We are not doing anything to the Law Society; we have merely put a challenge to the society that it should justify its use of compulsory fees, over and above what we have proposed. There is plenty of time for people to consult, to put up a case and to put forward their views.
At the moment, the hon. Gentleman is busy discussing tactics with the hon. and learned Member for Harborough (Mr. Garnier), but I can reassure the hon. Gentleman that we introduced the measures because we believed it right to do so. My hon. Friend the Member for Southampton, Test (Dr. Whitehead) made several points—incidentally, I too pay tribute to my hon. Friend's wife; I am sure that she does an excellent job. He raised the whole issue of whether the measure seems to conflict with the European convention on human rights. It could be argued that an unfettered power to raise compulsory subscriptions conflicts with that fundamental human rights convention.
As to whether the measure is a vindictive act in a great conspiracy in which we sit in darkened rooms in the House plotting the downfall of the Law Society—that is, of course, rubbish. The hon. and learned Member for Harborough reminds me of the character from the film "In the Line of Fire" who is obsessed by a particular person. If we broke into his upstairs room, we should see cuttings of the Lord Chancellor pasted on the walls of that darkened room. The fact is that the new clauses are carefully thought out; as my hon. Friend the Member for Test said, they have received widespread support. I am certain that they will be welcomed.
I know that the Bar welcomes the new clauses. Members of the Bar have a responsibility, and they too face a challenge. At my last meeting with the chairman and the vice-chairman of the Bar—the hon. Member for Surrey Heath (Mr. Hawkins) is a former member of the Bar Council and will be aware that it has been campaigning for these changes for many years—they were happy to rise to the challenge and to put forward a case.
Of course, the Bar and the Law Society still have access to voluntary funds and will be able to use them to fund the activities that have been referred to. As I have made clear, nothing will happen for 18 months. They will have an


opportunity to put up a case and to rise to the challenge. I am confident that all the articulate, intelligent, clever and hard working members of the Law Society and the Bar Council will be able to enter a dialogue with the Government. That is all we seek to do.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 7

FEES FOR SOLICITORS' PRACTISING CERTIFICATES

'.—(1) The Lord Chancellor may by order made by statutory instrument amend section 11(3) of the Solicitors Act 1974 (power of Law Society to apply fees payable on issue of practising certificates for any of its purposes) by substituting for the purposes referred to in it (at any time)—

(a) the purposes of the regulation, education and training of solicitors and those wishing to become solicitors, or
(b) both those purposes and such other purposes as the Lord Chancellor considers appropriate.

(2) No order shall be made under this section unless—

(a) the Lord Chancellor has consulted the Master of the Rolls and the Law Society, and
(b) a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 4

CODE OF CONDUCT

'. In the Justices of the Peace Act 1997, after section 39 insert—

Code of conduct for members etc

39A.—(1) The Lord Chancellor may prepare a code of conduct to be observed by—

(a) members of magistrates' courts committees; and
(b) members of selection panels for choosing members of such committees.

(2) The Lord Chancellor may from time to time prepare a revised version of the code.

(3) Before preparing the code or a revised version of the code the Lord Chancellor shall undertake such consultation as appears to him to be appropriate.

(4) The code, and any revised version of the code, shall come into force as provided by an order made by the Lord Chancellor by statutory instrument; and an order providing for the coming into force of the code or a revised version shall set out the code or revised version.

(5) A statutory instrument containing an order made by virtue of subsection (4) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Noncompliance with code

39B.—(1) The Lord Chancellor may make an order under subsection (2) below if he is of the opinion that—

(a) a member of a magistrates' courts committee; or
(b) a member of a selection panel for choosing members of such a committee,
has, without reasonable excuse, failed to observe the code.

(2) An order under this subsection shall state that the Lord Chancellor is of the opinion mentioned in subsection (1) above and may provide either or both of the following—

(a) that, on the making of the order, the person is to cease to be a member of the committee or selection panel

concerned or to cease to be such a member for a specified period; or
(b) that, for a specified period, the person may not be appointed (or co—opted) as a member of any magistrates' courts committee or any selection panel for choosing members of such a committee.

(3) The Lord Chancellor may by regulations made by statutory instrument make provision for the purpose of establishing whether persons have failed to observe the code.

(4) A statutory instrument containing regulations made by virtue of subsection (3) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.".'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 5

RECOVERY WHERE BODY UNDERTAKES TO MEET COSTS LIABILITIES

'.—(1) This section applies where a body of a prescribed description undertakes to meet (in accordance with arrangements satisfying prescribed conditions) liabilities which members of the body or other persons who are parties to proceedings may incur to pay the costs of other parties to the proceedings.

(2) If in any of the proceedings a costs order is made in favour of any of the members or other persons, the costs payable to him may, subject to subsection (3) and (in the case of court proceedings) to rules of court, include an additional amount in respect of any provision made by or on behalf of the body in connection with the proceedings against the risk of having to meet such liabilities.

(3) But the additional amount shall not exceed a sum determined in a prescribed manner; and there may, in particular, be prescribed as a manner of determination one which takes into account the likely cost to the member or other person of the premium of an insurance policy against the risk of incurring a liability to pay the costs of other parties to the proceedings.

(4) In this section "prescribed" means prescribed by regulations made by the Lord Chancellor by statutory instrument; and a statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) Regulations under subsection (1) may, in particular, prescribe as a description of body one which is for the time being approved by the Lord Chancellor or by a prescribed person.'.

'.—(1) This section applies where a body of a prescribed description undertakes to meet (in accordance with arrangements satisfying prescribed conditions) liabilities which members of the body or other persons who are parties to proceedings may incur to pay the costs of other parties to the proceedings.

(2) If in any of the proceedings a costs order is made in favour of any of the members or other persons, the costs payable to him may, subject to subsection (3) and (in the case of court proceedings) to rules of court, include an additional amount in respect of any provision made by or on behalf of the body in connection with the proceedings against the risk of having to meet such liabilities.

(3) But the additional amount shall not exceed a sum determined in a prescribed manner; and there may, in particular, be prescribed as a manner of determination one which takes into account the likely cost to the member or other person of the premium of an insurance policy against the risk of incurring a liability to pay the costs of other parties to the proceedings.

(4) In this section "prescribed" means prescribed by regulations made by the Lord Chancellor by statutory instrument; and a statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) Regulations under subsection (1) may, in particular, prescribe as a description of body one which is for the time being approved by the Lord Chancellor or by a prescribed person.'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

MR DEPUTY SPEAKER then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.

New Clause 12

ADJOURNMENT OF INQUEST IN EVENT OF JUDICIAL INQUIRY

'.—(1) In the Coroners Act 1988, after section 17 insert—
"Adjournment of inquest in event of judicial inquiry

17A.—(1) If on an inquest into a death the coroner is informed by the Lord Chancellor before the conclusion of the inquest that—

(a) a public inquiry conducted or chaired by a judge is being, or is to be, held into the events surrounding the death; and
(b) the Lord Chancellor considers that the cause of death is likely to be adequately investigated by the inquiry,
the coroner shall, in the absence of any exceptional reason to the contrary, adjourn the inquest and, if a jury has been summoned, may, if he thinks fit, discharge them.

(2) Where a coroner adjourns an inquest in compliance with subsection (1) above, he shall send to the registrar of deaths a certificate under his hand stating, so far as they have been ascertained at the date of the certificate, the particulars which under the 1953 Act are required to be registered concerning the death.

(3) Where a coroner has adjourned an inquest in compliance with subsection (1) above, the Lord Chancellor shall send him the findings of the public inquiry as soon as reasonably practicable after their publication.

(4) A coroner may only resume an inquest which has been adjourned in compliance with subsection (1) above if in his opinion there is exceptional reason for doing so; and he shall not do so—

(a) before the end of the period of 28 days beginning with the day on which the findings of the public inquiry are published; or
(b) if the Lord Chancellor notifies the coroner that this paragraph applies, before the end of the period of 28 days beginning with the day on which the public inquiry is concluded.

(5) Where a coroner resumes an inquest which has been adjourned in compliance with subsection (1) above—

(a) the provisions of section 8(3) above shall not apply in relation to that inquest; and
(b) if he summons a jury (but not where he resumes without a jury, or with the same jury as before the adjournment), he shall proceed in all respects as if the inquest had not previously begun and the provisions of this Act shall apply accordingly as if the resumed inquest were a fresh inquest.

(6) Where a coroner does not resume an inquest which he has adjourned in compliance with subsection (1) above, he shall (without prejudice to subsection (2) above) send to the registrar of deaths a certificate under his hand stating any findings of the public inquiry in relation to the death."

(2) In section 8(4) of that Act (power to summon jury), for "either before he proceeds to hold an inquest" substitute "before he proceeds to hold an inquest, on resuming an inquest begun with a jury after the inquest has been adjourned and the jury discharged".

(3) In the sidenote to section 16 of that Act (adjournment of inquest in certain cases), for "certain cases" substitute "event of criminal proceedings".'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 14

JUDGES HOLDING OFFICE IN EUROPEAN OR INTERNATIONAL COURTS

'.—(1) A holder of a United Kingdom judicial office may hold office in a relevant international court without being required to relinquish the United Kingdom judicial office.

(2) In this section—
United Kingdom judicial office" means the office of—

(a) Lord Justice of Appeal, Justice of the High Court or Circuit judge, in England and Wales,
(b) judge of the Court of Session or sheriff, in Scotland, or
(c) Lord Justice of Appeal, judge of the High Court or county court judge, in Northern Ireland, and

relevant international court" means—

(a) any court established for any purposes of the European Communities, or
(b) any international court (apart from the European Court of Human Rights) which is designated for the purposes of this section by the Lord Chancellor or the Secretary of State.

(3) A holder of a United Kingdom judicial office who also holds office in a relevant international court is not required to perform any duties as the holder of the United Kingdom judicial office but does not count as holding the United Kingdom judicial office—

(a) for the purposes of section 12(1) to (6) of the Supreme Court Act 1981, section 9(1)(c) or (d) of the Administration of Justice Act 1973, section 18 of the Courts Act 1971, section 14 of the Sheriff Courts (Scotland) Act 1907 or section 106 of the County Courts Act (Northern Ireland) 1959 (judicial salaries),
(b) for the purposes of, or of any scheme established by and in accordance with, the Judicial Pensions and Retirement Act 1993, the Judicial Pensions Act 1981, the Sheriffs' Pensions (Scotland) Act 1961 or the County Courts Act (Northern Ireland) 1959 (judicial pensions), or
(c) for the purposes of section 2(1) or 4(1) of the Supreme Court Act 1981, section 1(1) of the Court of Session Act 1988 or section 2(1) or 3(1) of the Judicature (Northern
Ireland) Act 1978 (judicial numbers).

(4) If the sheriff principal of any sheriffdom also holds office in a relevant international court, section 11(1) of the Sheriff Courts (Scotland) Act 1971 (temporary appointment of sheriff principal) applies as if the office of sheriff principal of that sheriffdom were vacant.

(5) The appropriate Minister may by order made by statutory instrument make in relation to a holder of a United Kingdom judicial office who has ceased to hold office in a relevant international court such transitional provision (including, in particular, provision for a temporary increase in the maximum number of judges) as he considers appropriate.

(6) In subsection (5) "appropriate Minister" means—

(a) in relation to any United Kingdom judicial office specified in paragraph (a) or (c) of the definition in subsection (2), the Lord Chancellor, and
(b) in relation to any United Kingdom judicial office specified in paragraph (b) of that definition, the Secretary of State.

(7) A statutory instrument containing an order made under subsection (5) shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

New Schedule 1

SCHEDULE

LEGAL SERVICES COMPLAINTS COMMISSIONER

Provision for discharge of functions

1.—(1) The Lord Chancellor may give general directions concerning the discharge of the functions of the Legal Services Complaints Commissioner.

(2) Any such directions shall be published by the Lord Chancellor in such manner as appears to him to be appropriate.

(3) Subject to any such direction and to the provisions of this Act, the Commissioner may make such provision as he considers appropriate for the discharge of his functions.

Delegation of functions

2.—(1) The Commissioner may delegate any of his functions to such members of his staff as he thinks fit.

(2) All reports prepared by or on behalf of the Commissioner must be signed by him.

Remuneration

3.—(1) The Lord Chancellor shall pay to, or in respect of, the Commissioner such amounts—

(a) by way of remuneration, pensions, allowances or gratuities, or
(b) by way of provision for any such benefits,
as he may determine.

(2) If—

(a) the Commissioner ceases to hold office, and
(b) it appears to the Lord Chancellor that there are special circumstances which make it right that he should receive compensation,

the Lord Chancellor may pay to him such sum as the Lord Chancellor may determine.

Staff

4.—(1) The Commissioner may appoint such staff as he thinks necessary for the discharge of his functions.

(2) Appointments shall be made by the Commissioner on such terms and conditions (including terms as to pensions, allowances and gratuities) as he may, with the approval of the Lord Chancellor, determine.

(3) The reference in sub?paragraph (2) to pensions, allowances or gratuities includes a reference to pensions, allowances or gratuities by way of compensation to or in respect of any of the Commissioner's staff who suffer loss of employment or loss or diminution of emoluments.

Annual and other reports

5.—(1)The Commissioner shall make an annual report to the Lord Chancellor on the discharge of his functions during the year to which the report relates.

(2) The Commissioner may, in addition, report to the Lord Chancellor at any time on any matter relating to the discharge of the Commissioner's functions.

(3) The Commissioner shall provide the Lord Chancellor with such information relating to the discharge of his functions as the Lord Chancellor may see fit to require.

(4) The Lord Chancellor shall lay before each House of Parliament a copy of any annual report made to him under sub-paragraph (1).

Accounts and audit

6.—(1) The Commissioner shall keep accounts with respect to his receipts and expenditure and shall prepare a statement of accounts with respect to each financial year.

(2) The accounts shall be kept, and the statement of accounts prepared, in such form as the Lord Chancellor may, with the approval of the Treasury, direct.

(3) The accounts shall be audited by persons appointed by the Lord Chancellor in respect of each financial year.

(4) The auditors shall send to the Lord Chancellor a copy of the statement of accounts and of their report.

(5) The Lord Chancellor shall lay before each House of Parliament a copy of every statement of accounts and auditors' report sent to him under this paragraph.

Financial provisions

7.—(1) The Lord Chancellor may require any professional body in relation to which a direction under section (Commissioner's functions) of this Act has been given (and not revoked) to make payments of such amounts as the Lord Chancellor considers appropriate to the Commissioner towards meeting the expenditure incurred (or to be incurred) by him in the discharge of his functions.

(2) To the extent that that expenditure is not met by payments under sub?paragraph (1), it shall be met by the Lord Chancellor out of money provided by Parliament.

(3) The Commissioner may, with the approval of the Lord Chancellor, pay fees or allowances to any person who, in the Commissioner's opinion, is qualified to assist him in the discharge of his functions and who so assists him.

Parliamentary disqualification

8. In Part III of Schedule 1 to—

(a) the House of Commons Disqualification Act 1975, and
(b) the Northern Ireland Assembly Disqualification Act 1975,
(disqualifying offices), insert (at the appropriate place in alphabetical order)—
"The Legal Services Complaints Commissioner."

Parliamentary Commissioner

9. In Schedule 2 to the Parliamentary Commissioner Act 1967 (which lists the bodies subject to the jurisdiction of the Parliamentary Commissioner), insert (at the appropriate place in alphabetical order)—

"The Legal Services Complaints Commissioner."

Acting Commissioner

10.—(1) The Lord Chancellor may appoint a person to exercise the functions of the Commissioner where—

(a) the Commissioner's office becomes vacant, or
(b) the Commissioner is incapable of exercising his functions or considers that it would be inappropriate for him to exercise any of his functions in connection with a particular matter (because of a possible conflict of interests or for any other reason).

(2) A person so appointed shall have the powers of the Commissioner but shall act only in accordance with the terms on which he is appointed.

(3) The Lord Chancellor may pay to any person so appointed such remuneration as he may determine.'.—[Mr. Vaz.]

Brought up, read the First and Second time, and added to the Bill.

Clause 27

CONDITIONAL FEE AGREEMENTS

Mr. Vaz: I beg to move amendment No. 23, in page 18, line 14, after
'but', insert (subject to subsection (5))'.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following: Government amendments Nos. 24 to 32.

Mr. Vaz: This group of amendments consists largely of technical amendments, either to ensure that new sections contained in clause 27 have the effect intended, or to make consequential drafting changes to amendments made earlier in the Bill's passage through Parliament.
I shall deal first with amendments Nos. 23 and 26. Part of the purpose of the changes that we have made to definitions of what constitutes a conditional fee agreement is to bring into statute two decisions of the courts from last year. The two cases in question are Thai Trading Co. v Taylor and Bevan Ashford v. Yeandle. The full implications of the two judgments have been set out earlier in the Bill's passage and are described in the explanatory notes, so I will not recite them again at this hour. However, the present draft of the proposed section 58 in clause 27 goes further than simply taking those judgments into statute. It would have the effect of making unlawful agreements that are otherwise sanctioned by statute, known as non-contentious business agreements.
This type of fee agreement is intended to provide a way that lawyers can offer to work for clients who have business that will not come, or is unlikely to come, before the courts. There are very many services that lawyers undertake other than litigation in the courts, and the way in which they choose to offer their services—particularly the way in which their fees are calculated—was never intended to be encompassed by the provision in clause 27.
In moving the amendment, I recognise that there is great disquiet that non-contentious business agreements are used to allow solicitors to offer to undertake cases before the employment tribunals on the basis of a contingency fee. Contingency fees are payable only if the client is successful and are calculated solely by reference to the amount of the award made by the tribunal. They allow the lawyer to share in the proceeds of the action. This kind of fee would be unlawful and unenforceable if it were used to fund a case before the courts. My noble and learned Friend the Lord Chancellor has clearly set out his views: he does not believe that that kind of a fee should be used in employment tribunals. It is a quirk of the law that the work of this tribunal falls within the definition of non-contentious work.
The Government will be considering further whether such fees should be lawful in the employment tribunal as part of a review of the practices, rules and procedures of all tribunals that is designed to ensure that they meet the requirements of European Union law and comply with European convention rights. As regards the employment tribunal, it will inevitably require consideration of the present provisions that do not allow the award of legal costs—except in exceptional circumstances—to successful parties.
I think that I can deal fairly quickly with amendments Nos. 24, 25, 27, 29 and 31, which are to the same effect as those urged on the Government in Committee by the

hon. and learned Member for Harborough (Mr. Garnier)— I am sorry that he is not in the Chamber to hear me lavish praise upon him. He sought a change in the proposed sections 58 and 58A of the Courts and Legal Services Act 1990 in clause 27 of the Bill. He asked—in a most eloquent manner—that, in place of the term "enhanced fees", we use the term most usually adopted to describe the additional payment due under a conditional fee agreement in the event of success: namely, a "success fee".
In committee, my hon. Friend the Member for Ashfield (Mr. Hoon) said that he had considerable sympathy with the hon. and learned Gentleman and agreed to seek parliamentary counsel's views. It was 11 May, and clearly a good day for the hon. and learned Member for Harborough because we accepted two of his proposals. As far as parliamentary counsel can see, it is possible to replace the term "enhanced fee" with "success fee". The change does not alter the substance, only the terminology.
Amendment No. 28 is little more than a drafting amendment, and follows on from changes made earlier in the Bill's passage to the new section 58 of the Courts and Legal Services Act 1990 contained in clause 27.
In response to concerns about the definition of the parties to a conditional fee agreement, which largely drew on the present definition in section 58(1), the proposed section 58(2)(a) was amended in another place. This subsection as currently drafted defines conditional fees solely in terms of the provider of services under the agreement, not the consumer. The subsection therefore encompasses the kind of collective agreements that membership organisations are likely to use when securing legal services on behalf of members. Amendment No. 28 to new section 58A(6) will ensure consistency with the revised section 58(2)(a).
Finally, amendments Nos. 30 and 32 are technical amendments to bring the language of the two clauses into line with the changes in name brought about by the introduction of the civil procedural rules on 26 April 1999.
I commend the amendments to the House.

Mr. Hawkins: In the temporary absence of my hon. and learned Friend the Member for Harborough (Mr. Garnier), it would be churlish if I did not acknowledge the praise lavished on him by the Minister. We spoke on another occasion about the fact that the term "garnishee order" is familiar to all lawyers. I know that the Minister referred to this as the Garnier amendment.
I am delighted that the Government have accepted the suggestions of my hon. and learned Friend the Member for Harborough. The Bill has undoubtedly been improved, as the term "success fee" will be more readily understood than the phrase "enhanced fee", which was open to possible misinterpretation.
On thanking the Minister earlier for his congratulations and welcome to me, I omitted to welcome him to his new post, as so many other hon. Members have done. May I remedy that omission by welcoming him warmly? I know that we shall have many amenable exchanges, even though we may disagree on some points of substance.

Mr. Burnett: I have made my views on conditional fee agreements known on many occasions during the passage of the Bill. Such agreements are riven with conflicts of


interest. Does the Minister believe that it should be incumbent on any solicitor acting in a conditional fee agreement to disclose that to the solicitor to the other side—not just the existence of the conditional fee agreement, but the amount or the extent of the uplift in such an agreement?

Mr. Vaz: If the solicitor wishes to do so, I do not see why he or she should not.

Mr. Burnett: I am grateful to the Minister. Does he agree that it should be compulsory to make such a disclosure?

Mr. Vaz: The detail of whether or not that should be incumbent on a solicitor will, I hope, be one of the issues considered in the consultation process during the summer months. I am sure that the hon. Gentleman's remarks will be taken into consideration. I am glad to see that the hon. Gentleman is back to his usual statesmanlike approach.

Mr. Peter Bottomley: I shall intervene briefly, as this is the only part of the discussion that is directly linked to conditional and success fees. I declare an interest. It is recorded in the Register of Members' Interests that I gave expert depositions in some civil liability cases in the United States, where I have seen the most appalling misuse of the courts process by lawyers.
I must be a little careful, as one case is still running. It has been said by others that there has been appalling misuse of the legal process by people who have enormous sums to gain. I do not think that that will happen to the same extent in this country.
I have a brother-in-law who is one of the pro bono solicitors who have been willing to take on cases that most others would not because their lawyer firms have a tradition of doing such work. The idea that we will find sufficient solicitors able to take on conditional fee work in such a way that will replace present legal aid is wrong. I have a current case in my constituency of an elderly woman, who is not the kind who wants to go money grubbing after an accident, who is finding it difficult to find a solicitor to take on her case.
I am not saying that all that would be solved by the amendment and I understand the sincerity of what the Minister has put forward, but many debates on amendments on Report are not just about what is going into present law but are about putting down markers for the next change.
What we are being asked to approve in terms of change to legal aid and the further opening up of success fees and conditional fees will have some benefit. In some ways it will help to restrict the unrestricted growth of legal aid. But it will also have many penalties and consequences which I hope that the Government will monitor. If they do that in association with the professional bodies, there will be much more to gain the next time the House returns to the subject. At the moment, few people would argue that consideration is fully satisfactory.

Mr. Vaz: I thank the hon. Member for Worthing, West (Mr. Bottomley) for his thoughtful and valuable contribution which was sincerely felt. He may have misunderstood the system in America. It has an advanced

case of contingency fees, as opposed to conditional fees, which is what Britain has. I, too, have similar reservations to contingency fees being used, but not to conditional fees. These arrangements have proved successful and they can focus the client and the solicitor on issues in a much more productive way. I can assure the hon. Gentleman that the Lord Chancellor and I would not be proposing the changes if we were not satisfied that the agreements do work and will work. However, I shall certainly take on board the thoughts that the hon. Gentleman has expressed today.
Amendment agreed to.
Amendments made: No. 24, in page 18, line 22, leave out 'enhanced fees' and insert 'a success fee'.
No. 25, in page 18, line 37, leave out 'enhanced fees' and insert 'a success fee'.
No. 26, in page 18, line 47, at end insert—
'(5) If a conditional fee agreement is an agreement to which section 57 of the Solicitors Act 1974 (non-contentious business agreements between solicitor and client) applies, subsection (1) shall not make it unenforceable.'. [Mr. Hill.]

Mr. Hawkins: I beg to move amendment No. 98, in page 19, line 3, after 'proceedings', insert
'save those brought under Section 82 of the Environmental Protection Act 1990'.
This is an important amendment. I hope that the House will bear with me if I take a little time to explain why not only we, but the Law Society and the crucial campaigning charitable organisation, Shelter, think so too. We hope to persuade the Minister and the Government that, even if they cannot accept the amendment today, they can, nevertheless, reflect on it further.
The Law Society strongly supports the amendment. It is intended to ensure that the decision of the Court of Appeal in Thai Trading Co. v. Taylor, reported in The Times on 6 March 1998, to which the Minister referred briefly when dealing with the previous group of amendments, is incorporated in full. The Court of Appeal's decision in that case overruled a previous decision of the divisional court in British Waterways Board v. Norman. It thus permits legal representatives to act in housing disrepair cases in magistrates courts for tenants of low means.
All hon. Members will be well aware of the crucial importance of housing disrepair cases involving tenants of low means. Many of us have acted in such cases during our own legal practice and, even more so, non-lawyers will have had such cases referred to them in their constituency surgeries.
10.30 pm
Legal aid is not available to such tenants because proceedings under the Environmental Protection Act 1990 are technically criminal proceedings; they therefore rely on lawyers who are prepared to work on their behalf on a speculative basis. The exclusion of all criminal proceedings from Thai Trading-type conditional fees thus bars those speculative arrangements. That is why we, as well as Shelter and the Law Society, think that the present position is unwise and unhelpful. The amendment would ensure that the rights given by Parliament in the 1990 Act, which was introduced by the previous Conservative Government, are not effectively removed by the Bill.
The Law Society points out—this is bound to be of concern to Members on both sides of the House, but perhaps to Government Back Benchers in particular—that, without that change being made, it will be not at all clear whether the Minister can properly confirm, as he and the Lord Chancellor have sought to do, that the Bill will comply with our obligations under the European convention on human rights. That is also our view.
The Government have incorporated the European convention on human rights into British law and they have to certify that every Act of Parliament will comply with it. That includes the Bill, but we respectfully agree with the Law Society that the Lord Chancellor and the Minister may have grave difficulty in certifying that, unless the amendment is accepted. A similar amendment moved by Lord Goodhart in the other place was withdrawn only after the Government said that they would consider the issue further and, if appropriate, table their own amendment. We therefore find it somewhat surprising that they are not prepared to accept our amendment, or table one very similar, today.
I was a member of the Standing Committee, which debated amendment No. 49 on the afternoon of 4 May. The Minister's predecessor—the Minister of State, Foreign and Commonwealth Office, the hon. Member for Ashfield (Mr. Hoon)—said that he could not accept an amendment that would make public funds available for representation for summary complaints, which are technically criminal proceedings because they require a complaint to a magistrates court to be issued. He argued that the risk of costs not being paid by a defendant was slight and went on to say:
I believe that other methods of funding such as no-win, no-fee agreements of the type that we constantly discuss can be used and the non-availability of legal aid does not prevent a complainant from taking a reasonable case to court."—[Official Report, Standing Committee E, 4 May 1999; c. 160.]
It was, therefore, with considerable surprise that members of the Law Society heard the then Minister say in Committee:
We believe that it would be imprudent, and possibly unjust, to make a single exception of that kind without fuller consideration of all the issues of the principle and practice raised by doing so."—[Official Report, Standing Committee E, 11 May 1999; c. 256.]
The Law Society says that it is not clear why the Government so changed their approach in the week between 4 May and 11 May, and assumes that some lobbying or some departmental interventions might have taken place. Who can say? Perhaps the Minister will enlighten us. However, the consequence is that, unless the amendment is accepted, Parliament will give people a right to take action in respect of housing disrepair and certain other nuisances even though it intends to deny those affected the means to enforce their rights.
Sadly, tenants of houses in disrepair are, by definition, likely to be of limited means. As the Minister must know from his constituency case work, it is extremely rare for such tenants to have the means to fund the legal cost of taking enforcement action. Magistrates court proceedings are an effective means of securing a remedy in such cases. The Law Society rightly says that tenants usually rely on solicitors being willing to take a case in the knowledge that, if unsuccessful, the tenant will be unable to pay their costs.
Many such cases are taken by law centres, and the Government are rightly at pains to say how much they support them. As the Minister knows, law centres are not allowed to charge their clients. Legal aid has never been available for such proceedings. Many may be entitled to free legal advice under the green form scheme, but as the Minister well knows, that cannot cover representation in court proceedings.
The Government propose to clear up any doubt about whether solicitors can act on such a basis by giving statutory force to the Court of Appeal's decision in respect of Thai Trading. That is very welcome. However, the bar on such agreements in criminal proceedings rules out their availability, and the Act will make them unenforceable unless it is changed.
As the issue raises considerable implications relating to the European convention on human rights—Parliament is expressly prohibiting the only kind of arrangement whereby such actions could be funded—the rights given to tenants under section 82 of the Environmental Protection Act 1990 by the last Government would become meaningless. The Bill is called the Access to Justice Bill, but, as the Law Society rightly says, there will be no access to justice for such tenants if it is left unamended. Certainly the Government would be very unwise if, in a Bill that they have entitled the Access to Justice Bill, they denied access to justice in a way that has previously applied.
In Thai Trading Co v. Taylor, the Court of Appeal expressly overruled the decision of the divisional court in British Waterways v. Norman, which was itself a housing disrepair case. In that case it was held that, in effect, solicitors could not recover costs in successful cases when they had acted speculatively. We want the Government to think again.
I found it particularly moving that a fax briefing that I received from Shelter on this matter drew attention—it was blocked in black—to the fact that Shelter's president had been the late great Cardinal Hume, to whom Members on both sides of the House have paid tribute, and who will be sadly missed in this country. I hope very much that, in tribute to Cardinal Hume if for no other reason, the Government will pay careful attention to what the organisation of which he was president for many years has said about clause 27.
Shelter is absolutely committed to supporting our amendment. It points out that it
provides a range of legal services for people with housing problems",
and that its advisers
provide legal advice and assistance on housing matters through our nationwide network on housing aid centres.
It has
a legal team with a wealth of experience of taking housing cases through the legal system.
It considers the amendment to be vital. It points out that its clients
are often disadvantaged citizens in urgent housing need,
and says:
It is vital that such people have access to justice and that their cases are dealt with speedily by the courts.


As Shelter says,
Section 82 prosecutions provide",
currently,
a vital remedy for many of our clients, particularly in the social housing sector"—
I am sure that that is important in the constituencies of the vast majority of hon. Members—
who otherwise have no effective means of combating conditions that may jeopardise the health of their families.
Shelter's housing aid centres deal with numerous cases of that kind every year, helping clients to bring prosecutions when, for example, unscrupulous landlords fail to deal with condensation, dampness or unsafe electrical circuitry. Shelter says:
Without legal aid or conditional fee agreements to fund these cases, many of them would not be brought.
Shelter says that it hoped that the Government would
return to its original thinking on this issue by restoring the position to that following the Court of Appeal's judgment in Thai Trading Co v Taylor by making a suitable amendment to the Courts and Legal Services Act during the passage of the Access to Justice Bill.
That, it says, was its understanding—as well as the Law Society's understanding—of the statement made by the Minister's predecessor, the hon. Member for Ashfield, in Committee on 11 May.
Shelter does not accept the Government's argument—nor do I, and nor do my hon. Friends—that an exception should not be made to the general principle that conditional fee agreements are not appropriate in criminal proceedings. It says:
By neither making legal aid available nor allowing conditional fees to fund these cases, many of our clients will be denied access to justice and essential works to improve their living conditions will not be carried out.
This is an important matter, and I strenuously urge the Minister to think again. If he cannot do so tonight, it is still not too late for the Government to indicate firmly that they intend to correct the position. It is not too late for them to accept our amendment—or a very similar proposal—to ensure that people have the opportunity to bring vital cases, and that the rights that they have enjoyed since the Conservative Government's 1990 Act will continue.

Mr. Vaz: I thank the hon. Member for Surrey Heath (Mr. Hawkins) for his kind comments, although we should now draw a line under all the congratulations from both sides of the House—or, in 100 years, people reading today's Hansard might think that there was something of a love-in going on. His congratulations, for which I thank him, must be the end of it. I thank him also for moving amendment No. 98 in the way that he has—although I had to pinch myself, as I never thought that I would see the day when a Conservative Front-Bench spokesman quoted Shelter in defence of his case.
As the hon. Member for Surrey Heath said, the amendment would allow conditional fee agreements to be used in bringing criminal prosecutions under section 82 of the Environmental Protection Act 1990.
A similar amendment was tabled in Committee. As my predecessor said then, section 82 of the Environmental Protection Act 1990 provides for summary criminal proceedings by someone complaining of a statutory nuisance. Proceedings under section 82 are criminal

proceedings. As such, in principle, they would be excluded under the general exception in section 58(10) of the Courts and Legal Services Act 1990 of criminal proceedings from proceedings in which conditional fees may be used.
I accept that part of the effect of the decision of the Court of Appeal in the case of Thai Trading Co. v. Taylor—a case decided last year, in which the Court of Appeal ruled that lawyers may agree with their clients that they will charge less than their normal fees, or no fee at all, if they are unsuccessful on behalf of their client—was to approve the use of conditional fee agreements in cases under section 82.
As the House will know, the decision in Thai Trading overturned an earlier decision, in the case of British Waterways Board v. Norman. In the latter case, an agreement between the solicitor and the client that, if the prosecution under section 82 were unsuccessful, the solicitor would not seek to recover costs against the client was held to be unlawful and unenforceable.
The question, therefore, is whether, in bringing the effect of the decision in Thai Trading into statute, we should reflect that decision in its entirety or make it subject to the general principle that conditional fees, with or without enhanced fees, may not be used in criminal proceedings.
There had been some concern, in Committee and elsewhere, about the need to restrict the scope of conditional fee agreements. For that reason, having given the matter very careful thought—and I mean very careful thought; I am sympathetic to what the hon. Member for Surrey Heath said—we have concluded that it would not be right to breach the general principle that conditional fees are not appropriate in criminal proceedings.
Amendment No. 98 proposes a single exception for criminal cases under section 82 of the EPA. There is nothing unique about that provision. There may well be provisions elsewhere in the criminal law with similar effect so that conditional fees might be a possibility. If we are to consider breaching the general principle, it is important that that is undertaken on a logical basis and is not piecemeal. Moreover, such a breach can be undertaken only after very careful thought about the impact of conditional fees—regardless of whether enhanced fees are being sought—in the criminal justice process.
The Government do not believe that such a careful consideration of the issues is possible in the time that the Bill will be considered by the House. We believe that it would be most inappropriate, and possibly unjust, to make a single exception of that type.
The hon. Member for Surrey Heath should not look so sad, because the Government are not unsympathetic to the concerns that lie behind the amendment or to concerns that tenants should be able to ensure that statutory nuisances are dealt with. However, we have to balance those concerns with the potential effect of allowing conditional fees in criminal cases.

Mr. Gareth Thomas: I understand the argument that my hon. Friend the Minister is making, but perhaps I could press him on one matter. How does he anticipate that those rather important cases brought under the Environmental Protection Act 1990 will be financed in future?

Mr. Vaz: In the way in which they are financed at present. Several agencies, including law centres, could help people in that position. My hon. Friend does not have to press me too much, because we are sympathetic, but we do not feel that it is appropriate to breach the general principle now.
I do not accept that the Bill would result in people ceasing to have access to the remedy afforded by section 82. Those with a strong case will continue to be able to prosecute successfully the person or body causing the statutory nuisance and to obtain a costs order in their favour, perhaps using the agencies that I have mentioned. There may be other remedies in the civil courts that they could pursue, for which conditional fees would be available. The procedures put in place by all local authorities that allow their tenants to have defects to their property put right remain.
The issue is raised in my constituency case bag and I am sure that other hon. Members have the same experience. I have set out the Government's view. We are not unsympathetic to the points that have been made, but we are concerned that if we breach the general principle, we shall find ourselves in all kinds of difficulty. In view of the sympathetic comments that I have made, I invite the hon. Member for Surrey Heath to withdraw the amendment.

Mr. Hawkins: I thank the Minister for expressing sympathy with the principles of the points that I have made and with the comments of the hon. Member for Clwyd, West (Mr. Thomas), who is also concerned about the matter. The Minister has promised to continue to look at the issue carefully, and has said that the Government may find another legislative opportunity soon to deal with that and other aspects of the criminal law to allay the concerns of the Law Society and organisations such as Shelter. In view of that, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 27, in page 19, line 25, leave out 'enhanced fees' and insert 'a success fee'.
No. 28, in page 19, line 38, leave out from beginning to 'any' in line 42 and insert
'A costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of'.
No. 29, in page 19, line 43, leave out
'the payment of enhanced fees'
and insert 'a success fee'.
No. 30, in page 19, line 45, leave out 'taxing' and insert 'assessment'.
No. 31, in page 19, line 47, leave out
'the payment of enhanced fees'
and insert 'a success fee'.—[Mr. Vaz.]

Clause 28

LITIGATION FUNDING AGREEMENTS

Amendment made: No. 32, in page 21, line 19, leave out 'taxing' and insert 'assessment'.—[Mr. Vaz.]

Clause 32

RECIPIENTS OF DISABILITY WORKING ALLOWANCE

The Solicitor-General: I beg to move amendment No. 33, in page 22, line 4, leave out 'disability working allowance' and insert 'disabled person's tax credit'.

Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss Government amendment No. 82.

The Solicitor?General: These technical amendments arise from the inter-relationship between this Bill and the Tax Credits Bill. As currently drafted, clause 32 of this Bill amends the Legal Aid (Scotland) Act 1986 to allow advice and assistance to be provided, without a means test or contributions, to recipients of disability working allowance. That is already the case for recipients of family credit. It is also already the case for recipients of both benefits in England and Wales.
The Tax Credits Bill, which we considered earlier today, provides for family credit and disability working allowance to be replaced by the working families tax credit and the disabled persons tax credit. That Bill also makes consequential amendments, including to the 1986 Act in relation to family credit.
Amendment No. 33 replaces the term "disability working allowance" with the term "disabled person's tax credit" in clause 32. Amendment No. 82 is a transitional provision to allow for the possibility that this Bill will come into force before the Tax Credits Bill.
Amendment agreed to.

Clause 36

RIGHTS OF AUDIENCE: EMPLOYED ADVOCATES

Mr. Vaz: I beg to move amendment No. 34, in page 24, line 31, leave out 'an advocate,' and insert
'a Crown Prosecutor or in any other description of employment,'.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 35 to 37.

Mr. Vaz: The purpose of the amendments is to clarify the drafting of clause 36, which enables all employed advocates, including Crown Prosecutors, to appear as advocates in the higher courts if otherwise qualified to do so. It disapplies any professional rules designed to prevent them from exercising rights of audience because of their status as employed advocates.
Amendments Nos. 34 and 37 make it clear that the clause applies to all employed lawyers, not solely to those employed principally as advocates. If suitably qualified, an employed lawyer may exercise rights of audience on even the most occasional basis.
Amendments Nos. 35 and 36 clarify an issue that my noble Friend the Lord Chancellor addressed in another place. The word "capacity" in subsection (2)(a) could be interpreted as enabling an employed advocate to offer their services direct to the public or to the clients of their employers, as distinct from their employers themselves.
Although the Government do not rule out that option in future, as the Lord Chancellor has explained, it is not our intention to authorise that development by means of this clause. The word "capacity"—as the amendments now make clear—was intended to strike down those professional rules which prevent an employed lawyer from appearing as the sole or leading advocate in a substantive case on behalf of his employer.
This is an important clause and is at the heart of the Government's policy on rights of audience. The amendments will help to ensure that the policy cannot be misinterpreted or mistaken.

Mr. Hawkins: It gives me great pleasure to respond to the Minister's helpful clarification of the amendments. As I declared in Committee, when I spoke from the Back Benches, I am a former chairman of the corporate counsels' organisation—the Bar Association for Commerce, Finance and Industry—and in that capacity I welcomed the Government's long-awaited removal of the bar on employed counsel and employed lawyers generally appearing in court on behalf of their employers. It is something for which the organisation that I used to chair campaigned for many years and it is a welcome change.
Some will wish the Government to go even further, and I am grateful to the Minister for indicating that they may be prepared to do so in future legislation, but at this stage the employed Bar generally has got a great deal of what it has long sought.
I think I am right in saying that I am the first corporate counsel ever to be either a Minister or a shadow Minister in any of the legal Departments, and it is therefore with a sense of humility that I speak in that capacity from the Front Bench. Having campaigned for these changes for many years, as a committee member and during my chairmanship of the Bar Association for Commerce, Finance and Industry, I have particular pleasure in welcoming them and the helpful clarification that the Minister has given this evening.

Mr. Dismore: I very much welcome the amendments, particularly those extending rights of audience to employed advocates, particularly solicitors. I am pleased that the clause as amended would get rid of restrictive qualifications, regulations and rules of conduct, but in this context I would highlight the rules relating to court dress, particularly wigs. Unless we have equality of court dress between different advocates there is a risk that although rights of audience may be extended, judges and those trying cases will discriminate between one variety of advocate and another. I therefore urge my hon. Friend the Minister to address that issue.

Mr. Burnett: We support the amendments and the increased rights of audience for the Crown Prosecution Service. In some parts of the country, notably Cornwall, the CPS has enjoyed rights of audience in Crown courts for many years. We also welcome clause 41, which is applicable to all exercising rights of audience, providing for an overriding duty to the court to act with independence in the interests of justice.
The Minister will be aware, however, that we oppose a state defender system. Can he confirm to the House that at the very least the Crown Prosecution Service and the criminal defence service should not come under the aegis of the same Department of State?

Mr. Grieve: The Government are addressing two matters in these amendments. First, they have sought to clarify that employed advocates should appear only on behalf of the person or group employing them and should not sell their services. I am sure that the Minister will find common ground with us in approving of that clarification.
On the second issue, I have one reservation to raise. I do so conscious of the fact that it could also apply to anyone who practises infrequently, whether or not they are employed. The whole thrust of the amendment to allow employed advocates to practise is on the basis that large numbers of highly qualified, employed people are not practising in solicitors' firms or at the Bar, but have all the requisite qualifications to appear in court and should therefore not be denied the opportunity of doing so.
With the change of emphasis introduced by the Parliamentary Secretary and the removal of the word "advocate", it has become quite clear that anyone who may, at one time, have obtained the qualification required to become a barrister or solicitor and who has continued to pay their subscription will be able to appear in court—even if an interval of 30 years has elapsed since they previously did so.
It can equally be said that that problem may arise with people who purport to have practised at the Bar or to have worked for a firm of solicitors and who may not have appeared in court during that period. However, there has at least been the merit of a certain amount of self-regulation or self-criticism within the solicitors' and barristers' profession, which may tend to make it less likely that such people would appear long after their qualifications had become redundant.
The amendment has highlighted the fact that there may well be individuals who will be able, quite easily, to exercise a right of audience in future, claiming all the panoply—including whatever robes may happen to be advocated by the hon. Member for Hendon (Mr. Dismore)—to appear in court, when they are massively poorly qualified to do so, and in circumstances where their employer may not have any capacity to scrutinise their ability to present a case properly.
If we are to go down this road, we will have to start thinking creatively about continuous assessment for barristers and solicitors. Once we get to the point which the Parliamentary Secretary has advocated and almost welcomed, real difficulties will be seen to arise with people who have the nominal qualification, but one that is so old and unused and is being deployed on behalf of so uncritical a client that it will bring the professional qualification into disrepute.

Mr. Garnier: I wish to ask the Parliamentary Secretary one question. Is it the Government's intention—it may be made clear elsewhere in the Bill—to allow employed lawyers to appear in court on behalf of third parties; that is, for people other than their employer? [Interruption.]


The Solicitor-General appears to be saying no. If that is the case, I will be satisfied. However, the language of the amendments was not as clear as it might have been, although it became marginally clearer as I listened to the Minister, However, the amendments do not deal with the point that I have addressed. If the Minister can give that simple assurance, I will be most grateful.

Mr. Vaz: I am happy to give the hon. and learned Gentleman that assurance.
I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) on his genius in bringing up wigs in the middle of discussions on this amendment. He is incredibly frustrated because his amendments were not called, and he is trying to tempt me down the road of court dress, to which the hon. Member for Beaconsfield (Mr. Grieve) also alluded. I will not go down that road. My hon. Friend and I can have many happy discussions about wigs, but there is no change at the moment.
The hon. Member for Torridge and West Devon (Mr. Burnett) is trying to drive a wedge between my hon. and learned Friend the Solicitor-General and me. My hon. and learned Friend is responsible for the Crown Prosecution Service, and the Lord Chancellor will be responsible for the criminal defence service. There is no empire building. Of course an Order in Council could change the way in which Departments operate, but the Government have absolutely no plans for that and it would be daft of any Government to want to do that in the future.
11 pm
I thank the hon. Member for Surrey Heath (Mr. Hawkins) for his comments, although I said that I would stop thanking and congratulating him. He is very knowledgeable about these issues and I know that during his time as a member of the Bar Council he campaigned hard for these measures. In a spirit of generosity, as we have named some provisions after the hon. and learned Member for Harborough (Mr. Garnier) and the inquest provision is named after my hon. Friend the Member for Hendon, we will name this provision after him.

Mr. Grieve: rose—

Mr. Deputy Speaker: Order. The hon. Gentleman has already made a contribution to this debate.
Amendment agreed to.
Amendments made: No. 35, in page 24, line 37, leave out 'or capacity'.
No. 36, in page 24, line 39, leave out 'as advocates' and insert
'or limit the circumstances in which that right may be exercised by them by requiring them to be accompanied by some other person when exercising it'.
No. 37, in page 24, line 43, leave out from beginning to end of line 2 on page 25 and insert 'employed.'.—[Mr. Vaz.]

Clause 46

PUBLIC NOTARIES: ABOLITION OF SCRIVENERS' MONOPOLY

Mr. Peter Brooke: I beg to move amendment No. 94, in page 27, line 36, at end insert—
'() No person shall take or use any name, title or description implying that he is certificated as a notary by the Incorporated Company of Scriveners of London unless he is qualified to practise as a Scrivener notary in accordance with the rules and ordinances of that Company.
() A person who contravenes the preceding subsection shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale'.
I immediately declare an interest as a former client of two firms of notaries which, prior to the Bill, were among those to enjoy the central London monopoly. In 1964, I employed the first in Portuguese when I was married by proxy in Brazil. A third of a century later, I employed the other in Spanish when I was a trustee of an archaeological-ecological project in the Andes in Peru. That said, the hour obliges me to speak telegraphically.
My interest in this debate is a constituency one, but in more senses than one. My hon. and learned Friend the Member for Harborough (Mr. Garnier), now the shadow Attorney?General, on which I richly congratulate him—if the Parliamentary Secretary, Lord Chancellor's Department does not rule me out of order—served as a harbinger of my speech when he spoke on the subject in Committee. I am grateful to the Parliamentary Secretary for having written to me on the strength of that speech.
I apologise to right hon. and hon. Members who may have been caught in the crossfire between two of my constituents, the Association of Solicitor Notaries of Greater London and the Incorporated Company of Scriveners of London, although members of the former have acknowledged to me that they have done most of the firing, some of which, including one inaccurate allegation about myself, has been mildly disobliging. The most vehement address, admittedly from someone who is not my constituent, has asked hon. Members to vote against any amendment that I might table, whatever its terms, which seems—I remark neutrally—an eccentric index of notarial professionalism.
The issue of the monopoly came up last year during consideration of the Competition Bill, provoking the Lord Chancellor's Department into accelerated consultation. I do not quarrel with the Lord Chancellor's conclusion, but I hope that he would not quarrel with my observation that the scale of the consultation was limited and that, judging by the parliamentary answer given by the then Minister of State, Lord Chancellor's Department on 2 March, those who were consulted did not include the users of notarial services in my constituency. It was because the consultation was slenderish that I tabled the amendment.
The amendment draws attention to the specialist role of the scrivener notaries, who have long had an interface with continental law; so much so that the society was admitted to the International Union of Latin Notaries at a ceremony in Buenos Aires last September—the first body in the world from a common law jurisdiction to be admitted to the union, which represents something of a triumph for the United Kingdom. The company sets similar admission requirements to those of its European counterparts.
Like many livery companies, the Worshipful Company of Scriveners has been the guardian of the art and mystery of its calling and has played a notable part in education in the profession. The faculty office of the Archbishop of Canterbury, discharging a responsibility in the profession that goes back to legislation in the reign of Henry VIII—an era that coincided with the alternative reign of Cardinal Wolsey—has made much use of the society in the devising, preparation and marking of notarial examinations. It is an irony that in that regard the society may have worked itself out of a job, because examining is passing into other hands and clause 46 will likewise remove it from the role of regulation in my constituency and more widely in central London.
The society's professional expertise has been recognised by the Lord Chancellor's Department which has expressed the view that, if its members have a professional edge, they will be able to demonstrate it in the marketplace. Branding is a reasonable challenge to the society, including perhaps the development of a kite mark, but the world outside—including Europe—has for centuries associated notarial activity in the City of London with the scrivener role, and it is therefore important that the definition and significance of that role can be protected against anyone seeking to arrogate to themselves the renown of scriveners by borrowing the name without justification or, in particular, membership of the company; if not, continental clients may cease to turn to London for those skills.
I said that I did not argue with the Lord Chancellor's conclusion. Ironically, the competition that he is ushering into central London in this regard may be matched by competition provided by the society's member firms outside central London, the society having hitherto felt that its role as a regulator in central London precluded it from competing outside. All would thus be winners, including clients of the various firms.
I hope that the Solicitor-General will indicate that he understands that the strength of the City of London is its multi-layered resource of skills and that that cannot be preserved if, in promoting competition through an afterthought to the Bill—as I am sure he will acknowledge—one risks tarnishing the family silver by removing the reasonable, traditional and honourable hallmarks of quality. The provision in amendment No. 94 should be welcomed as a protection for users. It in no way impedes the legitimate provision of notarial services at any level or description in the City or elsewhere.

Mr. Grieve: I welcome amendment No. 94, because it both meets the issue that the Lord Chancellor was trying to address in removing the monopoly, which appears to be archaic and unnecessary, but at the same time provides some measure of protection to the Incorporated Company of Scriveners in maintaining its identity in so far as the marketplace wishes that identity to be maintained.
The information provided by the Incorporated Company of Scriveners suggested that there are different roles for the notary public and the scrivener notary. In those circumstances, there is a clear entitlement for that distinction to be protected in their titles. I hope that the Government will accept amendment No. 94 because it appears to satisfy the company's just desire that people should not be misled about the different roles.

The Solicitor-General: It is always a pleasure to listen to the right hon. Member for Cities of London and Westminster (Mr. Brooke) and to learn a little more history, both generally and about the Brookes. However, the Government will resist the clause. I should explain briefly the background to the issue as it may not be familiar to every hon. Member.
Notaries authenticate certain legal documents, mainly for use abroad, by signing and sealing them. They may also prepare legal documents for use abroad, undertake conveyancing and probate work, translate foreign legal documents, administer oaths and take affidavits.
The Incorporated Company of Scriveners currently holds a monopoly over notarial work in the City of London and the surrounding three miles. Clause 46 will end that restrictive practice and, we hope, increase competition.
I have three general points to make in relation to the amendment. First, I emphasise that the Government's proposals go no further than abolishing the monopoly. They will not prevent notaries from being members of the scriveners' company if they wish, nor will they prevent members of that company from offering a competitive service compared with other notaries. There will be nothing to prevent notaries from advertising their adherence to the company, if they believe that that is an assurance of quality to the public. Those clients who want the specialist services that scrivener notaries provide will continue to be able to obtain them.
Secondly, I am not convinced that the public could be protected only by the creation of a new offence. Due to the specialist nature of the notarial work, scriveners' clients are not an uninformed group. They include financial and banking institutions and other large commercial organisations. If such clients had any doubt about whether someone was a scrivener notary, it would be open to them to check with the incorporated company.
Moreover, there are existing safeguards for the public against those who seek to misrepresent their position. I make particular reference to section 14 of the Trade Descriptions Act 1968, which covers false or misleading statements as to services. One of the leading cases under that section is Queen v. Breeze, which involved a person claiming to be an associate of the Royal Institute of British Architects. That was not true, and the Court of Appeal found that an offence had been committed under the 1968 Act; so the incorporated company may be able to take advice on the protection afforded by that section.
My third general point may be of interest to the House. The titles of "barrister" and "legal executive" are not protected. Under the Solicitors Act 1974, there is an offence similar to the one proposed. It covers people who pretend to be solicitors. However, it applies generally to solicitors, not to any single group. It does not apply, as would the amendment, to a special group of notaries.
Finally, there is no hard evidence that non-scriveners provide any lesser service than scriveners. The Archbishop of Canterbury's faculty office oversees the entire notarial profession and has made it clear that all notaries are qualified to do all notarial acts. The scriveners' monopoly is geographical and limited to certain areas of London. I therefore urge the right hon. Member for Cities of London and Westminster to withdraw the amendment.

Mr. Garnier: I seek clarification from the Solicitor-General. Did he say that section 14 of the Trade



Descriptions Act 1968 protects members of the company as a matter of law, or simply that they should take advice about whether it does? I think that we are entitled to the Solicitor-General's opinion.

The Solicitor-General: I give advice to the Government, not to private individuals. However, I urge the society to examine that section of the 1968 Act closely, as its authority bears directly on the matter raised.

Mr. Grieve: The Solicitor-General has advised the House to reject the amendment. One of his reasons is that the protection that it offers is not needed because another is available. In the circumstances, that opinion appears rather pertinent.

The Solicitor-General: I cited a leading Court of Appeal decision, which the hon. Gentleman should read closely.

Mr. Garnier: Is there a reference?

The Solicitor-General: Yes, it is 1973, Queen's Bench. The hon. Member for Beaconsfield (Mr. Grieve) should receive reassurance from that.

Mr. Brooke: I am grateful to the Solicitor-General for his response. He may not be aware that he made a mild slip of the tongue at the beginning of his speech when, instead of saying that he would resist the amendment, he said that he would resist the clause. As I had graciously said that I would not do so, I thought that position slightly perverse. I mention it merely to show that I was hanging on his lips throughout his speech.
I am grateful for the reference to the Solicitors Act 1974. I had been tempted to include a reference to the definition of solicitors, but the Solicitor?General clearly would have rebuffed me, and I have saved my breath intelligently. I am grateful for the spirit in which he has addressed the society's predicament and for the pointer that he offered, even if he came under sniper fire from elsewhere in the House about the possible paradox or contradiction in his advice. What he said will be helpful to my constituents, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered,

That clause 54 be transferred to end of line 32 on page 33.—[Mr. Vaz.]

Ordered,

That clause 59 be transferred to end of line 5 on page 31.—[Mr. Vaz.]

Ordered,

That clause 60 be transferred to end of line 32 on page 33.—[Mr. Vaz.]

Clause 70

ENFORCEMENT OF COMMUNITY ORDERS

Amendment made: No. 1, in page 39, line 14, leave out from '(which' to 'has' in line 16 and insert
'makes provision about the enforcement of community orders by the Crown Court)'.—[Mr. Cranston.]

Ordered,

That clause 70, as amended, be transferred to end of line 32 on page 33.—[Mr. Vaz.]

Clause 74

GREATER LONDON MAGISTRATES' COURT AUTHORITY

Amendment proposed: No. 100, in page 44, line 34, leave out from beginning to end of line 10 on page 46 and insert—

'Funding

59B.—(1) The Lord Chancellor may pay grants to the Greater London Magistrates' Courts Authority in respect of the Authority's expenditure.

(2) Grants under this section shall be paid at such times, in such manner and subject to such conditions as the Lord Chancellor may with the concurrence of the Treasury determine.

(3) Each London local authority shall pay to the Authority such amount in respect of—

(a) any kind of the Authority's expenditure in any year; or
(b) if less, such amount as may, in relation to that kind of expenditure and that year, be for the time being determined by the Lord Chancellor,

as may be determined in accordance with regulations made by the Lord Chancellor by statutory instrument.

(4) The Lord Chancellor may by regulations made by statutory instrument make provision as to the making of payments under subsection (3) above, including provision—

(a) as to whether payments are to be made by instalments or otherwise;
(b) as to the time when payments are to be made;
(c) conferring a right to interest on anything unpaid; and
(d) permitting a London local authority to anticipate a payment under this section when making calculations in accordance with section 32 of the Local Government Finance Act 1992 (originally or by way of substitute).

(5) The Lord Chancellor may with the consent of the Treasury make provision by regulations made by statutory instrument as to how any kind of the Authority's expenditure is to be determined.

(6) Subject to any such regulations, the Lord Chancellor may direct that in determining any kind of the Authority's expenditure there shall be taken into account or disregarded, to such extent as may be specified in the direction, such items as may be so specified.

(7) A statutory instrument containing regulations made by virtue of this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.—[Mr. Vaz.]

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 101 to 103 and 105 to 118.

Mr. Garnier: I rise merely to ask—perhaps it should have been a point of order—why the Minister considers it appropriate to move these lengthy amendments formally.

Mr. Deputy Speaker: That is not a matter for the Chair. If the Minister chooses to move them formally, that is a matter for him. If the hon. and learned Gentleman wishes to debate the amendments, he may do so.

Mr. Garnier: I merely seek an explanation from the Minister about what he intends. The Government have


proposed legislation and Ministers are present. It is their duty to explain to the House, and therefore to the public, what they propose to do.

Mr. Deputy Speaker: That is a matter for the Minister, but he has chosen to move the amendment formally.

Amendment agreed to.

Amendments made: No. 101, in page 46, line 14, after 'The' insert 'Greater London Magistrates' Courts'.

No. 102, in page 46, line 38, leave out from 'fund;' to 'arrangements' in line 42 and insert 'and
(b) make'.

No. 103, in page 46, line 45, after 'applying' insert—
'(a) Part VIII of the Local Government Finance Act 1988 (financial administration); and
(b)'.—[Mr. Vaz.]

Clause 98

COMMENCEMENT

Amendments made: No. 91, in page 62, line 16, leave out '61,' and insert
'61(2), section 70 and Schedule 10 and section (Adjournment of inquest in event of judicial inquiry),'.

No. 3, in page 62, line 17, after & 75' insert
(Code of conduct)'.—[Mr. Vaz.]

Clause 99

EXTENT

Amendment made: No. 104, in page 62, line 28, after 'Sections' insert
'(Judges holding office in European or international courts),'.—[Mr. Vaz.]

Schedule 7

POWERS OF LAW SOCIETY

Amendments made: No. 92, in page 88, line 28, leave out 'necessary' and insert 'appropriate'.

No. 70, in page 88, line 29, leave out 'the rules' and insert
'the provisions of rules made, or of any code or guidance issued, by the Council,'.

No. 71, in page 88, line 30, at end insert'. In—
(a) section 32(4) of that Act (power of Council of the Law Society to disclose report or information about solicitor's accounts to Director of Public Prosecutions for investigation and prosecution of offences), and
(b) paragraph 3 of Schedule 2 to the Administration of Justice Act 1985 (corresponding provision in relation to accounts of incorporated practices),
omit "to the Director of Public Prosecutions" and ", if the Director thinks fit,'.

No. 72, in page 88, line 31, leave out
'After section 33 of that Act'
and insert
'In the Solicitors Act 1974, after section 33'.

No. 73, in page 88, line 43, leave out
'to the Director of Public Prosecutions'.

No. 74, in page 88, line 45, leave out
',if the Director thinks fit,'.

No. 75, in page 89, line 4, leave out '(incorporated practices)'.
No. 76, in page 89, line 10, leave out
'to the Director of Public Prosecutions'.

No. 77, in page 89, line 11, leave out
', if the Director thinks fit,'.

No. 78, in page 89, line 13, at end insert—

'Intervention for breach of rules on practice, conduct and discipline

In Schedule 1 to the Solicitors Act 1974 (intervention in solicitor's practice), in paragraph 1(1) (circumstances in which Law Society may intervene), in paragraph (c) (failure to comply with rules made by virtue of section 32 or 37(2)(c)), after "section" insert "31,".'.

No. 79, in page 89, line 15, leave out 'the Solicitors Act 1974' and insert 'that Act'.

No. 80, in page 89, line 45, at end insert
'and
(b) whichever of the Society and the Tribunal made it may at any time revoke it.'.

No. 81, in page 90, line 9, at end insert—
'. In section 44(2) of that Act (breach of order by solicitor), for the words from "an order" to the end of paragraph (b) substitute "an order under section 43(2) is in force in respect of a person".'.—[Mr. Cranston.]

Schedule 10

ENFORCEMENT OF COMMUNITY ORDERS MADE BY CROWN COURT

Amendment made: No. 4, in page 106, leave out lines 11 to 13.—[Mr. Cranston.]

Ordered,

That Schedule 10, as amended, be transferred to end of line 36 on page 91.—[Mr. Cranston.]

Schedule 11

GREATER LONDON MAGISTRATES' COURT AUTHORITY

Amendments made: No. 105, in page 106, line 20, leave out from beginning to '(definition' in line 19 on page 107 and insert—

'The Public Works Loans Act 1965 (c.63)

. In section 2(1)(a) of the Public Works Loans Act 1965 (authorities to which Public Works Loans Commissioners may make unsecured loans), after sub-paragraph (iv) insert "and

(v) the Greater London Magistrates' Courts Authority;".

The National Loans Act 1968 (c.13)

. In paragraph 1(a) of Schedule 4 to the National Loans Act 1968 (authorities to which local loans may be made), after sub-paragraph (iv) insert "and

(v) the Greater London Magistrates' Courts Authority,".

The Road Traffic Offenders Act 1988 (c.53).

. In section 82(2A) of the Road Traffic Offenders Act 1988'.—

No. 106, in page 107, line 22, at end insert—

'The Local Government and Housing Act 1989 (c.42)

. The Local Government and Housing Act 1989 has effect subject to the following amendments.

. In section 39(1) (authorities to which provisions about revenue accounts and capital apply), after paragraph (e) insert—


(ea) the Greater London Magistrates' Courts Authority;".

. In section 67(3) (authorities to which provisions about interests in companies apply), after paragraph (g) insert—
(ga) the Greater London Magistrates' Courts Authority;".'.

No. 107, in page 107, line 24, leave out second 'of' and insert 'to'.

No. 108, in page 107, line 40, at end insert—

'The Local Government Finance Act 1992 (c.14)

.In section 19(2) of the Local Government Finance Act 1992 (exclusion of Crown exemption in relation to certain authorities), after paragraph (e) insert—
(ea) the Greater London Magistrates' Courts Authority;".'.

No. 109, in page 108, line 1, leave out
'of the Justices of the Peace Act 1997'.
No. 110, in page 108, line 6, leave out
'of the Justices of the Peace Act 1997'.
No. 111, in page 108, line 14, at end insert—
'. For section 50 substitute—

Pensions of employees of GLMCA

50.—(1) The Lord Chancellor may, with the consent of the Minister for the Civil Service, make provision by order made by statutory instrument for section 1 of the Superannuation Act 1972 (pensions of civil servants etc) to apply to persons employed by the Greater London Magistrates' Courts Authority (and may make such provision by amendment of that Act).

(2) An order under subsection (1) above may provide for the Authority to pay to the Minister for the Civil Service, at such times as he may direct, such sums as he may determine in respect of the increase attributable to such provision in the sums payable under the Superannuation Act 1972 out of money provided by Parliament.

(3) Where an order under subsection (1) above is made, the Minister for the Civil Service may, to such extent and subject to such conditions as he thinks fit—

(a) delegate to any person the function of administering a scheme made under section 1 of the Superannuation Act 1972, so far as relating to employees of the Authority; or
(b) authorise the exercise of that function (so far as so relating) by, or by employees of, any person.

(4) A person to whom the function of administering a scheme made under section 1 of the Superannuation Act 1972 is delegated under subsection (3)(a) above may, to such extent and subject to such conditions as he may determine, authorise the exercise of that function by, or by employees of, any person.

(5) Where a person is authorised under subsection (3)(b) or (4) above to exercise the function of administering a scheme made under section 1 of the Superannuation Act 1972, anything done or omitted to be done by or in relation to him (or an employee of his) in, or in connection with, the exercise or purported exercise of the function shall be treated for all purposes as done or omitted to be done by the person who authorised him.

(6) Subsection (5) above does not apply for the purposes of—

(a) any criminal proceedings against the authorised person (or any employee of his); or
(b) any contract between him and the person who authorised him, so far as relating to the function.

(7) A statutory instrument containing an order under subsection (1) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.".'.

No. 112, in page 108, line 15, leave out
'of the Justices of the Peace Act 1997.—[Mr. Cranston.]

Schedule 12

FUNCTIONS TRANSFERRED TO JUSTICES' CHIEF EXECUTIVES

Amendments made: No. 5, in page 109, leave out lines 25 to 28 and insert—

'2.—( l) Section 13 of the Evidence Act 1851 (proof of previous conviction by copy of record certified by clerk) is amended as follows.

(2) Number the existing provision as subsection (1) and for the words from "under the hand" to "such clerk or other officer," substitute "by the proper officer of the court where such conviction or acquittal took place".

(3) After that subsection insert—"

(2) In subsection (1) "proper officer" means—

(a) in relation to a magistrates' court in England and Wales, the justices' chief executive for the court; and
(b) in relation to any other court, the clerk of the court or other officer having the custody of the records of the court, or the deputy of such clerk or other officer."

The Criminal Procedure Act 1865 (c.18)

2A.—(1) Section 6 of the Criminal Procedure Act 1865 (proof of previous conviction of witness by certificate signed by clerk) is amended as follows.

(2) Number the existing provision as subsection (1) and for the words from "the clerk" to "such clerk or officer," substitute "the proper officer of the court where the offender was convicted".

(3) After that subsection insert—"

(2) In subsection (1) "proper officer" means—

(a) in relation to a magistrates' court in England and Wales, the justices' chief executive for the court; and
(b) in relation to any other court, the clerk of the court or other officer having the custody of the records of the court, or the deputy of such clerk or other officer."

The Prevention of Crimes Act 1871 (c.112)

2B.—(1) Section 18 of the Prevention of Crimes Act 1871 (evidence of previous conviction by record signed by clerk) is amended as follows.

(2) For the words from "clerk of the court" to "such clerk or officer;" substitute "proper officer of the court by which such conviction was made;".

(3) For "clerk or other officer" substitute "proper officer".

(4) At the end of that section insert—

"In this section "proper officer" means—

(a) in relation to a magistrates' court in England and Wales, the justices' chief executive for the court; and
(b) in relation to any other court, the clerk of the court or other officer having the custody of the records of the court, or the deputy of such clerk or other officer.".'.

No. 6, in page 109, line 39, at end insert
'(but that section as modified in relation to Northern Ireland by section 11 of that Act is not so amended)'.
No. 7, in page 134, leave out lines 3 and 4 and insert—
'172.—(1) Section 68 of the Merchant Shipping Act 1995 (power to summon witness) is amended as follows.

(2) In subsection (4) (particulars of fine to be given to clerk), for "clerk" substitute "proper officer".

(3) After that subsection insert—

"(4A) In subsection (1) above "proper officer" means—

(a) in relation to a magistrates' court in England and Wales, the justices' chief executive for the court, and
(b) in relation to a magistrates' court in Northern Ireland, the clerk of the court.".'.—[Mr. Cranston.]

Schedule 13

TRANSITIONAL PROVISIONS AND SAVINGS

Amendments made: No. 82, in page 137, line 45, at end insert—

'Legal aid in Scotland

.If section 32 of this Act comes into force before section 1 of the Tax Credits Act 1999, the reference in section 32 to disabled person's tax credit shall, until section 1 of the Tax Credits Act 1999 comes into force, have effect as a reference to disability working allowance.'.

No. 8, in page 141, line 6, leave out
'coming into force of section 74 of this Act,'
and insert
'Greater London Magistrates' Courts Authority becomes the magistrates' courts committee for Greater London,'.
No. 9, in page 142, line 10, leave out
'begins to act as a magistrates' courts committee,'
and insert
'becomes the magistrates' courts committee for Greater London,'.
No. 10, in page 142, line 12, at end insert—
'(2) For the purposes of sections 39A and 39B of the Justices of the Peace Act 1997 (inserted by section (Code of conduct) of this Act) the Authority shall be treated as a magistrates' courts committee until it actually becomes the magistrates' courts committee for Greater London.'.
No. 113, in page 143, line 4, at end insert—

'Stamp duty on transfer schemes

.—(1) Stamp duty shall not be chargeable—

(a) on any scheme under paragraph 32, or
(b) on any instrument or agreement which is certified to the Commissioners of Inland Revenue by the Lord Chancellor as made in pursuance of such a scheme.

No such scheme, and no instrument or agreement which is certified as mentioned in sub?paragraph (1)(b), shall be taken to be duly stamped unless—

(a) it has, in accordance with section 12 of the Stamp Act 1891, been stamped with a particular stamp denoting that it is not chargeable with that duty or that it is duly stamped, or
(b) it is stamped with the duty to which it would be liable, apart from this paragraph.

(3) Section 12 of the Finance Act 1895 shall not operate to require—

(a) the delivery to the Inland Revenue of a copy of this Act, or
(b) the payment of stamp duty under that section on any copy of this Act,

and shall not apply in relation to any instrument on which, by virtue of sub-paragraph (1), stamp duty is not chargeable.'.

No. 114, in page 143, line 29, at end insert—

'Pensions of inner London court staff

.—(1) The Lord Chancellor may by order made by statutory instrument make provision about the provision of pensions for or in respect of persons who are or have been members of the inner London court staff.

(2) An order under this paragraph may include provision for, or in connection with—

(a) enabling persons to participate, or continue to participate, in any pension scheme and requiring their employers to make contributions under that scheme, and
(b) the administration or management of pension schemes or pension funds.

(3) Provision of the kind specified in sub?paragraph (2)(a) may—

(a) with the consent of the Minister for the Civil Service, include provision for section 1 of the Superannuation Act 1972 (pensions of civil servants etc) to apply to persons who are or have been members of the inner London court staff, or
(b) include provision for persons who have been members of the inner London court staff but who are employees of the Greater London Magistrates' Courts Authority by virtue of a scheme under paragraph 32 to be regarded as continuing to be members of the metropolitan civil staffs for the purposes of section 15 of the Superannuation (Miscellaneous Provisions) Act 1967 (pensions of metropolitan civil staffs).

(4) An order under this paragraph containing provision of the kind specified in sub?paragraph (3)(a) may also contain provision for such body or person as may be specified in the order to pay to the Minister for the Civil Service, at such times as he may direct, such sums as he may determine in respect of the increase attributable to such provision (so far as referable to that body or person) in the sums payable under the Superannuation Act 1972 out of money provided by Parliament.

(5) Where an order is made under this paragraph containing provision of the kind specified in sub?paragraph (3)(a), the Minister for the Civil Service may, to such extent and subject to such conditions as he thinks fit—

(a) delegate to any person the function of administering a scheme made under section 1 of the Superannuation Act 1972, so far as relating to persons who are or have been members of the inner London court staff, or
(b) authorise the exercise of that function (so far as so relating) by, or by employees of, any person.

(6) A person to whom the function of administering a scheme made under section 1 of the Superannuation Act 1972 is delegated under sub?paragraph (5)(a) may, to such extent and subject to such conditions as he may determine, authorise the exercise of that function by, or by employees of, any person.

(7) Where a person is authorised under sub?paragraph (5)(b) or (6) to exercise the function of administering a scheme made under section 1 of the Superannuation Act 1972, anything done or omitted to be done by or in relation to him (or an employee of his) in, or in connection with, the exercise or purported exercise of the function shall be treated for all purposes as done or omitted to be done by the person who authorised him.

(8) Sub?paragraph (7) does not apply for the purposes of—

(a) any criminal proceedings against the authorised person (or any employee of his), or
(b) any contract between him and the person who authorised him, so far as relating to the function.

(9) An order under this paragraph may provide that any enactment repealed by this Act shall continue to have effect for any purpose specified in the order with such modifications as may be so specified.

(10) A statutory instrument containing an order under this paragraph shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(11) In this paragraph the "inner London court staff' means—

(a) the justices' chief executive employed by the magistrates' courts committee for the area consisting of the inner London boroughs,
(b) any justices' clerk for that area, and
(c) staff of the magistrates' courts committee for that area.'.—[Mr. Cranston.]

Schedule 14

REPEALS AND REVOCATIONS

Amendments made: No. 83, in page 145, line 54, at end insert—


'1998 c. 37.
The Crime and
Section 49(1)(j).



Disorder Act 1998.
Section 50(5).




In Schedule 8, paragraph 67.'.

No. 84, in page 146, line 12, column 3, leave out from 'section' to end of line 14 and insert
'32(4), the words "to the Director of Public Prosecutions" and the words ", if the Director thinks fit,".'.

No. 93, in page 146, line 36, column 3, at beginning insert 'Section 9(2)(g).'.

No. 85, in page 146, line 37, column 3, after '2,' insert
'in paragraph 3, the words "to the Director of Public Prosecutions" and the words ", if the Director thinks fit," and,'.

No. 86, in page 147, line 24, Column 3, at end insert—


'In Schedule 3— in paragraph 3, in sub-paragraph (1) the words "with the approval of the Treasury" and, in sub-paragraph (2), the words ", with the consent of the Treasury", and in paragraph 4(2) the words "given with the consent of the Treasury", and paragraph 9(3), the words "with the approval of the Treasury".'.

No. 115, in page 155, line 21, at end insert—


'1965 c. 63.
The Public Works Loans Act 1965.
In section 2(1)(a), the word "and" at the end of sub-paragraph (iii)

No. 116, in page 155, line 24, at end insert—


'1968 c. 13.
The National Loans Act 1968.
In Schedule 4, in paragraph 1(a), the word "and" at the end of sub-paragraph (iii).


1971 c. 56.
The Pensions (Increase) Act 197.
In Schedule 6, paragraph (d).'

No. 117, in page 155, leave out lines 27 to 35.

No. 118, in page 155, leave out line 44.—[Mr. Cranston.]

Ordered,

That Part IV(5) (Enforcement of community orders) of Schedule 14 be transferred to end of line 27 on page 148.—[Mr. Vaz.]

Title

Amendment made: No. 119, line 4, leave out from 'appeals' to 'court' in line 8 and insert ', courts, judges and'.—[Mr. Cranston.]

Order for Third Reading read.—[Queen's consent, on behalf of the Crown, signified.]

Mr. Vaz: I beg to move, That the Bill be now read the Third time.
The Bill has been before Parliament since December and has made good progress. We have already paid tribute during its course to the various people who have contributed to it both here and in another place, but I add my personal thanks to the excellent officials of my Department.
As the Lord Chancellor has said, the Bill aims to improve access to justice. We are determined to build structures and to provide services that go further towards meeting people's needs than legal services do at present. That is the purpose of the community legal service. That is why we are introducing contracting for legal services with quality assured suppliers, extending the use of conditional fees and rights of audience, and reforming the magistrates courts system.
Many clever, dedicated, hard working people do their best to meet the needs of legal services. However, the existing system does not meet the needs of ordinary people, those with little money or run-of-the-mill cases. We want to re-orient legal services to make them more customer focused and to base them on a real assessment of need. To that end, the Bill sets up the community legal service, which will have the dual tasks of considering the need for civil and family legal services and putting in place the services required to meet those needs, as far as available resources will allow.
We are creating a criminal defence service to replace criminal legal aid. Publicly funded criminal defence services will continue to be available in all cases where the interests of justice require it. We are making success fees, conditional fee arrangements and insurance premiums recoverable in costs. We intend to extend the use of no win, no fee agreements. No hon. Member has successfully demonstrated that they are not the best possible way to extend access to justice in many cases. They will open up the law to many people to whom legal aid is currently not available.
We are reforming rights of audience by giving full rights to all lawyers who are suitably qualified and we are setting up a system to encourage the regulation of the legal professions to change with the times. We have put in place this very evening a means to encourage professional legal bodies, and in particular the Law Society, to handle complaints from customers much better. We hope never to use them but we would have failed in our duty if we had not acted. We are ensuring that civil appeals will be held at the right level and dealt with in a way proportionate to their weight and complexity.
Lastly, we are changing the organisation and management of magistrates courts, the better to serve the public and help our plans for better co-ordination in the civil justice system. I think that hon. Members will see that this is an impressive agenda for change. The creation of a community legal service is the most innovative part of the Bill and I believe that it will prove to be the most far-reaching proposal. The legal aid system was set up in a different world where recourse to law was far less frequent. The system has since grown substantially in real terms.
A Government bent on modernising and improving the whole range of public services must also look to see whether legal aid is being used in the right way. The


striking feature of our legal aid system is that it is not based on an objective assessment of what is needed. Nor do we know whether the outcome of the expenditure is the best that could be achieved. Of course, many worthwhile cases are supported and will continue to be supported, but other cases are supported in which there must be doubt as to whether pursuing them represents good use of public money. I, for one, would not wish to see taxpayers' money spent on funding legal services where alternatives are available.
Our reforms will enable resources to be concentrated on the greatest need and will maximise the benefit from the money that is spent on legal aid. The use of contracts of civil, legal and family legal services will pay great dividends. For the first time, we will have quality assured suppliers for all those who use legal services. At the moment, those who use publicly funded legal services, indeed all who use legal services, have little way of finding out which suppliers have provided good service and which provide a less good service. Those who use publicly funded services should get the best possible service.
The Access to Justice Bill will enable us to improve legal services in the interests of those who use them. Those who oppose the Bill are lending their support to inflexible services, which do not best meet the needs of those whom they are meant to serve, and to those elements who wish to keep everything as it was. We want, and I believe that we have with the Bill, a modern system of justice for the new millennium. I commend it to the House.

Mr. Garnier: I join the Minister in congratulating all who have taken part in our debates on keeping their temperature moderate. We had an amusing and sometimes constructive time in Committee and we have had a sometimes enjoyable, sometimes illuminating, but always good-tempered time this evening.
The Minister can be forgiven for much that is in the Bill because he has only recently been able to get his fingers on it. During the Committee stage, when the Bill was amended by the Government and, I am happy to say, at least twice by the Opposition—or at least our suggestions were incorporated in Government amendments that have been made this evening—the Minister played a rather silent role by virtue of his then post as Parliamentary Private Secretary to the Attorney-General. So he cannot be accused of playing a willingly silent role. He was unable for the same reason to speak on Second Reading.

Mr. Vaz: I did speak on Second Reading.

Mr. Garnier: The Minister is right. Indeed, my right hon. and learned Friend the Member for North-East Bedfordshire (Sir N. Lyell) complained that this radical Government were allowing this radical Member to speak to a Bill that belonged to his master's Department. Perhaps the Government could not find a single Back Bencher prepared to speak in favour of the Bill. The Minister was the first member of the parliamentary

Labour party to speak in favour of the Bill. Every other Back-Bench contributor spoke sceptically or with qualified support for the Bill.

Mr. Dismore: rose—

Mr. Garnier: Here we go: the man with the spring in his back. I am glad to see that he is still on form and the spring is still working.

Mr. Dismore: The hon. and learned Gentleman has made that joke before and it was not particularly funny then. I simply point out to him that several Labour Members spoke in favour of the Bill on Second Reading and many more wished to speak, but there simply was not time for them all to be called.

Mr. Garnier: If the hon. Gentleman remembers, the hon. Member for Leicester, East (Mr. Vaz) was the first Back Bencher to speak. It may have been—

Mr. Vaz: I was very senior.

Mr. Garnier: Oh, and very senior too. Top Minister speaks—I am very happy to hear it. I do not think that we need spend too much time on this little history of the Access to Justice Bill. I shall return to one or two of the points that I intended to make.
During the two years since the Government came into office, I have been impressed by the fact that they were full of high intentions—there have been hugely powerful speeches and much rhetoric. However, they have little understanding of what they are doing.
I suggest that all the Government's reforms—both those introduced in the Bill and those introduced outside by the Lord Chancellor and his Department—can simply be described as economically illiterate, politically inept and intellectually confused. Nothing that we have heard during the Bill's passage through the House or during today's debates has persuaded me that my descriptions are inaccurate. Those views were merely reinforced as I watched the Government stumble from day to day. Indeed, there was yet another piece of chaotic business management this afternoon, as a rebellion emerged among Labour Back Benchers that could not be quashed by the Government. The hon. and learned Member for Medway (Mr. Marshall?Andrews) persuaded many of his fellow Back Benchers—I think there were 49, including himself—to sign his early-day motion criticising the removal of personal injury cases from legal aid. A considerable number of those Labour Members joined the hon. and learned Gentleman in the Division Lobby this evening. The Government can claim no credit for producing a Bill that is either popular or right; they have managed to do precisely the opposite.
In his remarks, the Parliamentary Secretary, Lord Chancellor's Department appeared to be attempting to sell anything—it could have been a vacuum cleaner, dog food or some other goods that one could find in a supermarket—but if one thought that he was describing the contents of the Access to Justice Bill, one would justifiably have been confused. As I have said before, the Bill is a Christmas tree or a coat hanger; it contains a huge number of additional powers that the parliamentary Labour party is lamely giving the Lord Chancellor.
There will be a huge number of executive powers to make law through secondary legislation. I realise that the Government find it boring when I make such remarks, but the job of the Opposition is to point out to the public that the sniggerers on the Government's Front and Back Benches are doing a huge disservice to the public whom they were elected to serve.
The Bill is called the Access to Justice Bill and, as I have said on several occasions, if I were a frivolous person, I should find that hugely amusing, because it is not an access to justice Bill but a denial of access to justice Bill. When one reads read Parts I, II and III even a casual glance shows that, once those clauses, and the amendments to those clauses and the new clauses that have been discussed today, become law—we are fortunate that a House of Lords still exists and is prepared to reconsider the Bill when it leaves this place—some of them will be deleterious to the interests of justice, damaging to the interests of our constituents, and leading increasingly to a denial of access to justice.
When Labour Members walk into the Division Lobby tonight, some of them may never have read the Bill and some may not have had the advantage of hearing the Minister trying to explain what the Government are about. At their advice surgeries, those Members will learn shortly—although not necessarily next Saturday, or even this year, but next year and the year after—when the number of solicitors providing legal aid has been reduced from approximately 11,000 to 3,000, that solicitors are not available in their towns, cities and villages to assist their most vulnerable constituents.
Labour Members do not need to accept all the blame for that, but in the remaining minutes of the debate, I urge them to think carefully about what they are about to do. They may think that the Bill causes difficulties for lawyers. So what? Any Bill that causes difficulties for lawyers is to be applauded. This, however, is a Bill that will destroy access to part of the welfare state. If the Labour party was elected to do that, it could have fooled me. Many of those who voted in May 1997 for the glorious new regime of this Prime Minister can also justly claim to have been fooled—and judging from the grunts and the groans that I hear emanating from the Treasury Bench, I suspect that many Ministers have been fooled also.
I can demonstrate the damaging effect of the Bill by considering only a few of its aspects. While we support the creation of the community legal service in clause 4, the Opposition are concerned about the Government's total inability to realise the mistake that they are making in failing to investigate and assess what is necessary to make that service work properly. The least able and the most vulnerable in our society must have some chance to fend for themselves by bringing actions in law with the assistance of the state.
The hon. and learned Member for Medway pointed out that personal injury cases funded by the state make the Government a profit. This self-righteous Government are destroying the ability of litigants in certain categories of personal injury cases to access state funds. The Government think that they are doing a good thing but the opposite is true. Personal injury cases cost the Government nothing, yet this Treasury-driven Bill is designed to save the Government money.
In clause 12, the Government have decided to introduce a criminal defence service that will allegedly be a mirror image of the Crown Prosecution Service. The CPS had teething troubles and goodness only knows what will happen with the criminal defence service. That will create a situation that used to exist only in communist China and Soviet Russia, where the state prosecutes and defends people.
If Government Members think that is a matter for levity, they should heed the words of Sidney Kentridge, a member of the South African Bar and a distinguished member of the Bar of this country. In a recent lecture, he pointed out that in apartheid South Africa the only thing that stood between the oppressive state regime and the independence and freedom of citizens was the independent Bar and the criminal defendant's knowledge that the lawyer representing him was free from the influence of the state.
This charming new Labour Government are trying to persuade their followers that a criminal defence service, comprising state-employed lawyers, will not be influenced by the need to kow-tow to its employer or by the fact that the next promotion depends on pleasing the Government. The Government cannot pretend that that will not have a damaging effect upon the service's ability to act fiercely and freely as an advocate on behalf of its clients.
On part II of the Bill and the dangers associated with the conditional fee arrangements, the Government claim that conditional fee arrangements are the complete answer to the destruction of legal aid. The Conservative party does not oppose the introduction of conditional fee arrangements—indeed, we introduced them ourselves. However, we are concerned about the gay abandon with which the Government have abolished legal aid and replaced it with conditional fee agreements. They know—or they should know—that the use of conditional fee arrangements, without proper insurance and a mature insurance market to support them, will simply not work.
It is no good saying that legal aid helped the poor, and those with discretionary income could make their own decisions, but middle England was unable to get to the courts. It is no good the Government saying that they have corrected that problem if, in so doing, they have created another by taking away from the poor, the vulnerable, the elderly, the injured and the disabled the ability to get hold of a conditional fee agreement.
In the circumstances that the Bill will create, conditional fee agreements will not be available for all to use. It is unthinkable that the people who now use legal aid will run up and down the high streets of England and Wales market-testing conditional fee agreements or checking the portfolio of risk of one firm of solicitors against another. That is naive and unreal.
Having outlined some of our concerns, may I make it clear that we agree with parts of the Bill? Parts IV, V, VI and VII are largely uncontroversial. Although they have not received the scrutiny that some of the more controversial parts of the Bill have been given, they have been considered, and I hope that they will be further considered in the other place when the Bill returns to it.
My overriding complaint about the Bill is that it seeks to do the wrong thing in the wrong way. It seeks to persuade the gullible hon. Members who will support it that it creates no problems for which they need feel in the


least bit responsible. Let me warn them that over the next two years the Bill will turn their majorities to dust. I invite my right hon. and hon. Friends and others of good will in the House to join us in voting against Third Reading.

Mr. Dismore: I should to declare an interest as a solicitor who has practised in the field of personal injury law for 20 years or more.
I welcome the extension of conditional fees and the proposals for the recovery of the success fee and insurance premium. Unlike most of those who have criticised the extension of success fees and related matters, I have practical experience, and I am sure that the provisions will be successful. I also welcome the assurances given today by my hon. Friend the Minister on the fallback position—the protections that will remain for personal injury victims in the legal aid scheme for cases that are expensive to investigate or are in the public interest. I look forward to seeing that protection even more fleshed out in the funding code that is in the Bill.
I welcome the debate that we had in Committee on Queen's counsel, and I claim a mini-triumph—I see from the Government amendment for which I have been lobbying that QCs are to pay the full cost of administering the QC system through the more generous application fees that they will have to pay. I acknowledge the Government's response to the concerns that I expressed in Committee about the way in which QCs are remunerated, and the assurance that the Government are prepared to consider further steps to end the fat-cattery, perhaps turning the dangerously obese lawyers into those who are merely seriously overweight. We have already discussed proportionality, double manning and the rate for the job.
I welcome one of the new clauses introduced tonight, which there was no time to debate and which my hon. Friend generously called the Hendon clause. That is the one that relates to the telescoping of the inquest and inquiry procedure, following major disasters. For too long we have put the relatives of victims through far too much distress, duplication of hearings, delay and expense by making them relive the same experiences over and over again.

Mr. Vaz: My hon. Friend knows that QCs throughout the country quiver when they hear his name. He also knows that my noble and learned Friend the Lord Chancellor has made a number of improvements to the silk system and will always try to find ways to improve it further.

Mr. Dismore: I am grateful to my hon. Friend for that assurance. No doubt we can continue our dialogue in an attempt to sort out the issue of remuneration, even if I cannot quite convince my noble and learned Friend the Lord Chancellor that QCs should be abolished altogether.
The new clause on inquiries is important. It means that we can now look after victims' relatives and victims themselves far more effectively. This is the first stage in that regard and I look forward to further reforms in due course.

Mr. Burnett: I congratulate and thank all those who have taken part in the debates on the Bill leading up to tonight, and especially officials of the House.
I have highlighted tonight and at earlier stages of the Bill Liberal Democrats' grave misgivings with parts of it. The abolition of legal aid for personal injury cases except criminal negligence is a grave mistake and the Government will have much time to rue the day that they railroaded the provision through the House. It saves no money and it prejudices the poor and vulnerable.
I hope that the Minister will find some time to read the paper so ably and clearly written by Matthias Kelly, secretary of the Personal Injuries Bar Association, entitled "The cost of legal aid in personal injury litigation in England and Wales". It demonstrates clearly and unambiguously that the provision will not save money. Rightly, many conscientious Labour Members have opposed the measure.
Another regrettable feature of the Bill is the power, often unfettered, which it gives the Lord Chancellor to set up the criminal defence service. That is another example of the inherent conflict of interest which also characterises conditional fee agreements.
We have to ask whether quality legal services and access to justice will be available throughout the country when the Bill is enacted, which no doubt it will be. We shall have to wait and see, but I have my doubts. The Bill is deeply flawed and we shall vote against it.

Mr. Grieve: I, too, preface my remarks by saying that the Bill's passage through its various stages has been an education, during which a number of changes have been made to it. Moreover, the presenter of the Bill has changed from the Minister of State, Foreign and Commonwealth Office, the hon. Member for Ashfield (Mr. Hoon), with his academic cynicism and discourse, to the present Minister who, with his courteous emollience, has brought it finally to its close before the House.
If ever there has been a missed opportunity, it is this Bill. There are aspects of it that I can welcome, just as my hon. and learned Friend the Member for Harborough (Mr. Garnier) did, but there are also aspects where we have grievously failed to address some of the principal issues which concern the difficulties over access to justice.
Bearing in mind conditional fee agreements, which we have debated again this evening, and the problems of legal aid, especially for the most disadvantaged, it is extraordinary that the whole area of contingency legal aid, despite having been touched on in Committee, and despite the fact that there has been a hint at times that it may be considered in future, and that it might provide a real alternative for ensuring that all could obtain access to justice on the same principles as those that existed in terms of accessibility under the old legal aid system, even though there might be some financial forfeit, has never been properly considered. Instead, we have gone down a road which, while it may bring certain advantages to some, will undoubtedly be a massive disadvantage to the most vulnerable within our society. I deeply regret that. If anything makes this legislation flawed, it is that.
I reserve my gravest reservations for the principle of the criminal defence service. We have moved progressively towards a situation where the provision and the services of the justice system are, in a curious way, being nationalised.
It is extraordinary that, although the Labour party has apparently embraced the idea that privatised services may be of some benefit, we are moving towards a continental criminal justice system—which, taken to its ultimate expression, existed in the old communist countries. The lawyer was simply the state functionary who was sent off to represent one element or other—whether as a prosecutor or a defender—and was always regarded as a lowly cog in the machine.
I simply do not see where the advantages lie in establishing the criminal defence service and it was made clear in Committee that there might be circumstances in which individual choice in respect of getting a lawyer from outside the CDS would be restricted. That fills me with foreboding. That measure has been introduced by the Government who had the courage to incorporate the European convention on human rights into our law, which strikes me as shocking. One can conclude only that the Government have absolutely no regard for civil liberties or the rights of accused people in respect of the criminal justice system. That seems to have been emphasised by the suggestion that there is worse to come with the denial of the right to trial by jury for certain categories of offence. I deeply regret that.
Those are the principal reasons why I cannot lend support to the Bill, even though parts of it have much to commend them. The Government will come to regret the way in which they were driven down this road, whether by financial considerations or simply by lack of any regard for established systems. Although those systems may be imperfect, they have nevertheless delivered justice of good quality.
I have always acknowledged, however, that there have been problems over expense. As I said on Second Reading, we have started to throw the baby out with the bath water and I am afraid that we will regret having passed the Bill.

Mr. Hawkins: I shall speak briefly before the Minister concludes the debate. On behalf of the official Opposition, I echo the words of my hon. Friend the Member for Beaconsfield (Mr. Grieve). My hon. and learned Friend the Member for Harborough (Mr. Garnier) described the Bill as being either a Christmas tree or a coat hanger. I prefer to call it an attempt by the Government at a portmanteau Bill.
There was much debate in Committee about the combination of Henry VIII clauses, which we deeply regret and opposed, and the fact that the Lord Chancellor has often been compared with Henry VIII's ultimately most unsuccessful Lord Chancellor, Cardinal Wolsey. The Bill attempts to combine the worst features of Henry VIII and Cardinal Wolsey, which is a feat in itself. My hon. and learned Friend the Member for Harborough rightly said that some of the Bill fits in with what George Orwell called newspeak, in which words mean exactly the opposite of what the Government claim.
On Second Reading, I referred at length from the Back Benches to the criticisms of the Bill made by Baroness Kennedy of the Shaws, the distinguished Labour lawyer, in the other place. None of her concerns about the Government's proposals for a criminal defence system adopting the worst excesses of the United States public defender system have been addressed at any stage.
When the Solicitor-General wound up the debate on Second Reading, he said, rather desperately:
On the whole, my hon. Friends welcome the Bill."—[Official Report, 14 April 1999; Vol. 329, c. 321.]
He said that even though almost every Labour Back Bencher who had spoken had attacked him and the then Minister.
As my hon. and learned Friend the Member for Harborough said, we welcome some aspects of the Bill—in particular, in respect of the inquest point referred to by the hon. Member for Hendon (Mr. Dismore), which we did not have time to debate at length—but there are still a lot of bad things in it. As my hon. and learned Friend said, this is a denial of access to justice Bill in so many regards. I invite the 20 Labour Members who voted with us on the personal injury matter to join us, and hon. Members from both sides of the House, in the Lobby to vote against the Bill's Third Reading.
I ask the Minister to correct an uncharacteristically ungracious remark that he made earlier. He said that it was surprising to hear a Conservative spokesman using the arguments of a charity such as Shelter. That remark was not characteristic of him and I invite him to withdraw it. I encourage hon. Members of all parties who have a conscience to oppose the Bill.

Mr. Vaz: With the leave of the House, Mr. Deputy Speaker.
This is the right Bill at the right time. We have a radical and reforming Lord Chancellor, and the Bill will help us to modernise justice in Britain. I commend it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 301, Noes 151.

Division No. 217]
[11.54 pm


AYES


Abbott, Ms Diane
Blears, Ms Hazel


Adams, Mrs Irene (Paisley N)
Boateng, Paul


Ainger, Nick
Borrow, David


Alexander, Douglas
Bradley, Keith (Withington)


Allen, Graham
Bradley, Peter (The Wrekin)


Anderson, Donald (Swansea E)
Bradshaw, Ben


Armstrong, Rt Hon Ms Hilary
Brinton, Mrs Helen


Atkins, Charlotte
Brown, Russell (Dumfries)


Austin, John
Browne, Desmond


Banks, Tony
Buck, Ms Karen


Barnes, Harry
Burden, Richard


Barron, Kevin
Burgon, Colin


Bayley, Hugh
Caborn, Rt Hon Richard


Beard, Nigel
Campbell, Alan (Tynemouth)


Beckett, Rt Hon Mrs Margaret
Campbell, Mrs Anne (C'bridge)


Begg, Miss Anne
Campbell, Ronnie (Blyth V)


Benn, Hilary (Leeds C)
Campbell-Savours, Dale


Benn, Rt Hon Tony (Chesterfield)
Cann, Jamie


Bennett, Andrew F
Casale, Roger


Benton, Joe
Cawsey, Ian


Blackman, Liz
Chapman, Ben (Wirral S)






Chaytor, David
Henderson, Ivan (Harwich)


Clapham, Michael
Hepburn, Stephen


Clark, Rt Hon Dr David (S Shields)
Heppell, John


Clark, Dr Lynda (Edinburgh Pentlands)
Hesford, Stephen



Hewitt, Ms Patricia


Clark, Paul (Gillingham)
Hill, Keith


Clarke, Charles (Norwich S)
Hinchliffe, David


Clarke, Rt Hon Tom (Coatbridge)
Hodge, Ms Margaret


Clarke, Tony (Northampton S)
Hoey, Kate


Clelland, David
Hood, Jimmy


Clwyd, Ann
Hoon, Geoffrey


Coaker, Vernon
Hope, Phil


Coffey, Ms Ann
Hopkins, Kelvin


Cohen, Harry
Howells, Dr Kim


Coleman, Iain
Hoyle, Lindsay


Colman, Tony
Hughes, Ms Beverley (Stretford)


Connarty, Michael
Humble, Mrs Joan


Cook, Frank (Stockton N)
Hurst, Alan


Corbett, Robin
Hutton, John


Corbyn, Jeremy
Iddon, Dr Brian


Corston, Ms Jean
Illsley, Eric


Cousins, Jim
Jackson, Ms Glenda (Hampstead)


Cranston, Ross
Jackson, Helen (Hillsborough)


Crausby, David
Jamieson, David


Cryer, John (Hornchurch)
Jenkins, Brian



Cummings, John
Johnson, Alan (Hull W & Hessle)


Cunningham, Jim (Cov'try S)
Jones, Barry (Alyn & Deeside)


Dalyell, Tarn
Jones, Mrs Fiona (Newark)


Darling, Rt Hon Alistair
Jones, Helen (Warrington N)


Darvill, Keith
Jones, Jon Owen (Cardiff C)


Davey, Valerie (Bristol W)
Jones, Dr Lynne (Selly Oak)


Davidson, Ian
Jones, Martyn (Clwyd S)


Davies, Rt Hon Denzil (Llanelli)
Jowell, Rt Hon Ms Tessa


Dawson, Hilton
Keeble, Ms Sally


Denham, John
Keen, Alan (Feltham & Heston)


Dismore, Andrew
Keen, Ann (Brentford & Isleworth)


Dobbin, Jim
Kennedy, Jane (Wavertree)


Donohoe, Brian H
Khabra, Piara S


Doran, Frank
Kidney, David


Dowd, Jim
Kilfoyle, Peter


Drew, David
King, Andy (Rugby & Kenilworth)


Dunwoody, Mrs Gwyneth
King, Ms Oona (Bethnal Green)


Eagle, Angela (Wallasey)
Kumar, Dr Ashok


Eagle, Maria (L'pool Garston)
Ladyman, Dr Stephen


Efford, Clive
Lawrence, Ms Jackie


Ellman, Mrs Louise
Lepper, David


Ennis, Jeff
Leslie, Christopher


Fisher, Mark
Levitt, Tom


Fitzsimons, Lorna
Lewis, Ivan (Bury S)


Flint, Caroline
Lewis, Terry (Worsley)


Follett, Barbara
Liddell, Rt Hon Mrs Helen


Foster, Michael Jabez (Hastings)
Linton, Martin


Foster, Michael J (Worcester)
Livingstone, Ken


Foulkes, George
Lloyd, Tony (Manchester C)


Galloway, George
Lock, David


Gapes, Mike
Love, Andrew


Gardiner, Barry
McAvoy, Thomas


George, Bruce (Walsall S)
McCabe, Steve


Gerrard, Neil
McDonagh, Siobhain


Gibson, Dr Ian
Macdonald, Calum


Gilroy, Mrs Linda
McDonnell, John


Godman, Dr Norman A
McIsaac, Shona


Godsiff, Roger
McKenna, Mrs Rosemary


Goggins, Paul
McNutty, Tony


Golding, Mrs Llin
Mactaggart, Fiona


Gordon, Mrs Eileen
McWalter, Tony


Griffiths, Jane (Reading E)
McWilliam, John


Griffiths, Nigel (Edinburgh S)
Mahon, Mrs Alice


Griffiths, Win (Bridgend)
Mallaber, Judy


Grogan, John
Mandelson, Rt Hon Peter


Hall, Mike (Weaver Vale)
Marsden, Paul (Shrewsbury)


Hall, Patrick (Bedford)
Marshall, David (Shettleston)


Hamilton, Fabian (Leeds NE)
Marshall, Jim (Leicester S)


Hanson, David
Marshall-Andrews, Robert


Harman, Rt Hon Ms Harriet
Martlew, Eric


Healey, John
Maxton, John





Meacher, Rt Hon Michael
Simpson, Alan (Nottingham S)


Meale, Alan
Singh, Marsha


Merron, Gillian
Skinner, Dennis


Michie, Bill (Shef'ld Heeley)
Smith, Angela (Basildon)


Milburn, Rt Hon Alan
Smith, Rt Hon Chris (Islington S)


Miller, Andrew
Smith, Jacqui (Redditch)


Mitchell, Austin
Smith, John (Glamorgan)


Moonie, Dr Lewis
Smith, Llew (Blaenau Gwent)


Moran, Ms Margaret
Snape, Peter


Morgan, Ms Julie (Cardiff N)
Soley, Clive


Morley, Elliot
Spellar, John


Mountford, Kali
Squire, Ms Rachel


Mudie, George
Starkey, Dr Phyllis


Mullin, Chris
Steinberg, Gerry


Murphy, Denis (Wansbeck)
Stewart, David (Inverness E)


Murphy, Jim (Eastwood)
Stewart, Ian (Eccles)


Naysmith, Dr Doug
Stinchcombe, Paul


Norris, Dan
Stoate, Dr Howard


O'Brien, Mike (N Warks)
Stott, Roger


Olner, Bill
Strang, Rt Hon Dr Gavin


Organ, Mrs Diana
Stringer, Graham


Osborne, Ms Sandra
Stuart, Ms Gisela


Palmer, Dr Nick
Taylor, Rt Hon Mrs Ann (Dewsbury)


Pearson, Ian



Pendry, Tom
Taylor, Ms Dan (Stockton S)


Pickthall, Colin
Thomas, Gareth (Clwyd W)


Pike, Peter L
Thomas, Gareth R (Harrow W)


Plaskitt, James
Timms, Stephen


Pollard, Kerry
Tipping, Paddy


Pope, Greg
Todd, Mark


Pound, Stephen
Touhig, Don


Powell, Sir Raymond
Trickett, Jon


Prentice, Ms Bridget (Lewisham E)
Turner, Dennis (Wolverh'ton SE)


Prentice, Gordon (Pendle)
Turner, Dr Desmond (Kemptown)


Purchase, Ken
Twigg, Derek (Halton)


Quin, Rt Hon Ms Joyce
Twigg, Stephen (Enfield)


Quinn, Lawrie
Vaz, Keith


Radice, Giles
Walley, Ms Joan


Rammell, Bill
Ward, Ms Claire


Raynsford, Nick
Wareing, Robert N


Reed, Andrew (Loughborough)
Watts, David


Roche, Mrs Barbara
Whitehead, Dr Alan


Rooker, Jeff
Wicks, Malcolm


Rooney, Terry
Williams, Rt Hon Alan (Swansea W)


Ross, Ernie (Dundee W)



Rowlands, Ted
Williams, Alan W (E Carmarthen)


Roy, Frank
Wills, Michael


Ruane, Chris
Winnick, David


Ruddock, Joan
Winterton, Ms Rosie (Doncaster C)


Russell, Ms Christine (Chester)
Wise, Audrey


Salter, Martin
Wood, Mike


Sarwar, Mohammad
Woolas, Phil


Savidge, Malcolm
Wright, Anthony D (Gt Yarmouth)


Sawford, Phil



Sedgemore, Brian
Tellers for the Ayes:


Sheerman, Barry
Mrs. Anne McGuire and


Short, Rt Hon Clare
Mr. Clive Betts.




NOES


Ainsworth, Peter (E Surrey)
Browning, Mrs Angela


Allan, Richard
Bruce, Ian (S Dorset)


Amess, David
Burnett, John


Ancram, Rt Hon Michael
Burns, Simon


Arbuthnot, Rt Hon James
Butterfill, John


Baldry, Tony
Campbell, Rt Hon Menzies (NE Fife)


Beggs, Roy



Bercow, John
Cash, William


Beresford, Sir Paul
Chope, Christopher


Blunt, Crispin
Clappison, James


Body, Sir Richard
Collins, Tim


Boswell, Tim
Cormack, Sir Patrick


Bottomley, Rt Hon Mrs Virginia
Cran, James


Brady, Graham
Curry, Rt Hon David


Brazier, Julian
Davies, Quentin (Grantham)


Breed, Colin
Davis, Rt Hon David (Haltemprice)


Brooke, Rt Hon Peter
Dorrell, Rt Hon Stephen






Duncan, Alan
Norman, Archie


Duncan Smith, Iain
Öpik, Lembit


Emery, Rt Hon Sir Peter
Ottaway, Richard


Evans, Nigel
Page, Richard


Faber, David
Paice, James


Fabricant, Michael
Paterson, Owen


Fallon, Michael
Pickles, Eric


Fearn, Ronnie
Prior, David


Flight, Howard
Randall, John


Forth, Rt Hon Eric
Redwood, Rt Hon John


Fowler, Rt Hon Sir Norman
Rendel, David


Fox, Dr Liam
Robathan, Andrew


Fraser, Christopher
Robertson, Laurence (Tewk'b'ry)


Gale, Roger
Roe, Mrs Marion (Broxbourne)


Garnier, Edward
Ross, William (E Lond'y)


George, Andrew (St Ives)
Ruffley, David


Gibb, Nick
Russell, Bob (Colchester)


Gill, Christopher
St Aubyn, Nick


Gillan, Mrs Cheryl
Sanders, Adrian


Gorman, Mrs Teresa
Sayeed, Jonathan


Gray, James
Simpson, Keith (Mid-Norfolk)


Green, Damian
Smith, Sir Robert (W Ab'd'ns)


Greenway, John
Soames, Nicholas


Grieve, Dominic
Spicer, Sir Michael


Gummer, Rt Hon John
Spring, Richard


Hamilton, Rt Hon Sir Archie
Stanley, Rt Hon Sir John


Hammond, Philip
Steen, Anthony


Harris, Dr Evan
Streeter, Gary


Hawkins, Nick
Swayne, Desmond


Hayes, John
Syms, Robert


Heald, Oliver
Tapsell, Sir Peter



Heath, David (Somerton & Frome)
Taylor, Ian (Esher & Walton)


Hogg, Rt Hon Douglas
Taylor, John M (Solihull)


Howard, Rt Hon Michael
Taylor, Matthew (Truro)


Howarth, Gerald (Aldershot)
Taylor, Sir Teddy


Jack, Rt Hon Michael
Tonge, Dr Jenny


Jenkin, Bernard
Tredinnick, David


Jones, Nigel (Cheltenham)
Trend, Michael


Key, Robert
Tyler, Paul


King, Rt Hon Tom (Bridgwater)
Tyrie, Andrew


Kirkbride, Miss Julie
Viggers, Peter


Kirkwood, Archy
Walter, Robert


Laing, Mrs Eleanor
Wardle, Charles


Lansley, Andrew
Waterson, Nigel


Leigh, Edward
Webb, Steve


Letwin, Oliver
Wells, Bowen


Lewis, Dr Julian (New Forest E)
Whitney, Sir Raymond


Lidington, David
Whittingdale, John


Lloyd, Rt Hon Sir Peter (Fareham)
Widdecombe, Rt Hon Miss Ann


Loughton, Tim
Wilkinson, John


Luff, Peter
Willetts, David


MacKay, Rt Hon Andrew
Willis, Phil


Maclean, Rt Hon David
Winterton, Mrs Ann (Congleton)


McLoughlin, Patrick
Winterton, Nicholas (Macclesfield)


Madel, Sir David
Woodward, Shaun


Malins, Humfrey
Yeo, Tim


Mates, Michael
Young, Rt Hon Sir George


Mawhinney, Rt Hon Sir Brian



May, Mrs Theresa
Tellers for the Noes:


Moore, Michael
Mr. Stephen Day and


Moss, Malcolm
Mrs. Jacqui Lait.

Question accordingly agreed to.

Bill read the Third time, and passed.

NORTHERN IRELAND GRAND COMMITTEE

Ordered,

That—

(1) the matter of the Review of the Criminal Justice System in Northern Ireland be referred to the Northern Ireland Grand Committee for its consideration;

(2) at the sitting on Thursday 8th July—

(i) the Committee shall take questions for oral answer and shall then consider the matter referred to it under paragraph (1) above;
(ii) the Chairman shall interrupt proceedings at 5 o'clock; and
(iii) at the conclusion of those proceedings, a Motion for the adjournment of the Committee may be made by a Minister of the Crown, pursuant to Standing Order No. 116(5).—[Mr. Jamieson.]

Metropolitan Police

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]

Mr. Charles Wardle: In this debate I intend to question the accountability of the Metropolitan police over their arrest of Mohamed Al Fayed last year. I shall also question the accountability of the security services, which influenced the decision to arrest him because he had openly challenged their role over the death of his son in Paris. I shall also touch in passing on his citizenship application, but only in so far as it is linked to the arrest.
The subject is highly controversial. I hope that the Minister will allow me to take a few moments to place my involvement in context and explain how I came to write to Sir Paul Condon about these matters last year. I have already referred a Home Office official to my letter to Sir Paul and I apologise to the Minister if that did not filter through to her.
On 4 June 1997, I introduced an Adjournment debate on the unfairness of Department of Trade and Industry inquiries. One of the case studies that I used to demonstrate the inequities of the system was the House of Fraser inquiry. I said that the inspectors' investigation into the House of Fraser takeover had been so contaminated by the late "Tiny" Rowland's lies and interference that the Fayed brothers had been well and truly stitched up. The interests that I declared in that debate apply here.
After the debate, the Home Office decided to drop its previous objections to the Fayeds which arose directly from the discredited House of Fraser report, but not before I had taken the opportunity to impress on Ministers and officials the depth and extent of Rowland's corrupt influence. After the debate, Mohamed Al Fayed asked to meet me at the House of Commons, and protested about Rowland's malign influence. I then presented my own analysis of various facets of the Fayeds' citizenship case at a private meeting with the Home Secretary at Queen Anne's gate.
Thereafter, I began a voluntary intermediary role between the Home Office and Al Fayed and his lawyers—mainly, but as it turned out not exclusively, concerned with the DTI inquiry. This ended when the Home Secretary approved Ali Fayed's citizenship application, having set aside the DTI findings, but refused Mohamed Al Fayed. Throughout the exercise I reported my meetings and correspondence to Sir Gordon Downey and then to Ms Filkin and briefed parliamentary colleagues and Lobby journalists whenever they expressed an interest.
Having been directly involved in the Home Office's earlier consideration of the applications, I was not in a position to make my own recommendations. At no stage did I try to lobby anyone, as the Home Office will confirm, but I will tell the House what I told the Home Secretary privately after he announced his decision. I said that, whereas I could not comment on his interpretation of the cash-for-questions issue, I disagreed most emphatically with his eleventh hour objection to Al Fayed's alleged lack of probity over Rowland's vicious little scam involving stolen gems that never were in a safety deposit box. It is Rowland's safety deposit

box snare and the subsequent behaviour of a few senior Metropolitan police officers who engineered the deliberately public arrest of Al Fayed, prompting a jamboree of media speculation and hostility that I wish to address first, as it raises clear questions of accountability.

Mr. Gerald Howarth: Will my hon. Friend give way?

Mr. Wardle: No. I have no intention of giving way, as my hon. Friend did not approach me beforehand.
Well before that arrest was made, those senior police officers and the Crown Prosecution Service had in their possession clear evidence that Rowland had paid hundreds of thousands of pounds into the Jersey bank account of the key prosecution witness and his common-law wife, but the police refused to consider that evidence until after the extremely damaging and high-profile arrest of Al Fayed. Shortly before he died, Rowland admitted his covert payments to the key witness in the discovery process for the civil action that he began after the police case collapsed.
Al Fayed's counsel, a former first Treasury counsel who regularly prosecuted for the Crown, insisted that the payments should first be investigated, on the ground that, if there had been payments, they would jeopardise the entire validity of the prosecution and no arrest should properly be made. Burton Copeland, Al Fayed's solicitor, showed Scotland Yard that Rowland's allegations that valuables had been stolen from his deposit box were weak in the extreme. Rowland was unable to verify that he had ever owned what he claimed to be stolen—let alone that he had placed it in the box 30 years earlier. Burton Copeland gave Scotland Yard the details of Rowland's payments to Robert Loftus, a disaffected ex-employee of Harrods, but the police deferred the investigation of payments to Loftus, arrested Al Fayed and released him on bail which was periodically renewed amid frenzied media speculation.
The safety deposit box scam developed into a tributary inquiry of my intermediary role. I am a lifelong admirer of the police and I was proud to assume responsibility in the House of Commons for police business as a Home Office Minister, but the blatantly unfair conduct of the safety deposit box inquiry prompted me to speak to the Commissioner of Police of the Metropolis and to write to him on 27 February last year in the following terms:
I am sure your officers will do their job with absolute fairness. But if their actions give rise to public humiliation and the allegation of theft turns out to be unfounded, I shall return to the subject with the vigour you would expect of me.
Hence this debate.
Why did the police, who had done little or nothing about Rowland's patently false allegation from May to November 1997, suddenly acquire fresh enthusiasm for the case at the end of that year? Why did they arrest Al Fayed with a prior tip-off to the media in March 1998, despite having known for weeks about the bribery of the key witness, to which Rowland himself later admitted?
Burton Copeland voiced the same concern in a letter of 5 May 1999 to Assistant Commissioner Veness, who was in charge of the case. He wrote:
Your officers were investigating an allegation that was dependent on the evidence of Messrs. Loftus and Rowland. On 29 January 1998 your officers were given information indicating


that Rowland was secretly paying vast sums of money to Loftus.… Having been put on notice, as your officers were, for them to ignore the material and its potential ramifications and to proceed with arrests and interviews would in any case, I submit, be perverse and unreasonable, let alone in a case of such obvious sensitivity with such a dubious backdrop. My clients might be forgiven for thinking that the prime objective was to put them, and Mr. Al Fayed in particular, through the indignity and public humiliation of arrest.
Significantly, Al Fayed' s solicitors now have in their possession a note from Rowland's solicitors, Cameron Markby Hewitt, reporting that Rowland told them on 2 February 1996 that he had been involved in activities for MI6 immediately after the war and had committed various unlawful acts.
The Scotland Yard and Home Office grapevine—which no one in Whitehall will discount—makes no secret of one interpretation of events. It is that Al Fayed had incurred the wrath of the Security Service, and its stringers in the press and elsewhere, after the tragic deaths in August 1997 of Diana, Princess of Wales, Dodi Fayed and their chauffeur Henri Paul. Al Fayed had given offence by his increasingly vocal protest that the Security Service—with which Veness has liaison responsibility at Scotland Yard—had not been sufficiently open about its activities in Paris when the tragedy occurred. The grapevine quotes a top police officer as saying:
I don't care what the evidence is. I want that man arrested.
Eventually, the Metropolitan police admitted to Al Fayed's solicitors that the only offence they could find had been criminal damage to a paperclip. Bail was lifted and proceedings dropped, but the media humiliation had served its purpose. The press hatred and dishonesty had known no bounds. It had been open season for the media, thanks to Rowland's lies in the DTI inquiry and then the safety deposit box scam leading to Al Fayed's arrest.
The Home Office official in charge of the Fayed citizenship applications, Andrew Walmesley, said that he had followed the safety deposit box saga and, in the end, had discounted it. On the telephone last October, he told Al Fayed's citizenship solicitors D.J. Freeman that the criminal investigation and civil proceedings were no longer of concern. Yet when the citizenship file came before the Home Secretary this year, the safety deposit box incident—disregarded by Walmesley—re-emerged as a question of probity. That was particularly surprising in view of Christopher Can QC's demolition of the probity argument in the re-submission to the Home Office.
It was as if the dropping of the discredited DTI report as evidence against Al Fayed had to be balanced by the late inclusion of the safety deposit box affair—a second barrel, along with the debatable objection to cash for questions, with which to shoot down the application. After a delay of 15 months, the Home Secretary had complied with Lord Woolf's Appeal Court ruling that reason for refusal be given by declaring that the safety deposit box was such a reason.
Whether that would have seemed to the Home Secretary a really convincing reason had it not been for Al Fayed's arrest and prolonged bail and the media onslaught is an interesting question. If the alleged want of probity marked another reason for refusal—namely, the antipathy of the Security Service and others towards Al Fayed—the Home Secretary should have said so openly if he was not to fall foul of Lord Justice Woolf. However, that is a question for the courts, and not for me.
The accountability of the Metropolitan police for their perverse conduct of the criminal investigation should be a matter of concern to this House. There are other sources of information that indicate a cover-up of events before and after the Paris tragedy that raise questions of accountability for the Security Service as well.
I do not subscribe to conspiracy theories. I draw no conclusions about what happened on that fateful day. I have no inclination to question the conduct or anticipate the outcome of a French judicial inquiry into a car crash in France. Judge Stephan has proved to be more than a match for the British press by declaring that the Mercedes was travelling at 62 mph, and not 113 mph as was previously reported as fact in Britain. It is possible, but not certain, that the judge will admit fresh evidence that throws doubt on Henri Paul's blood test. It is not known whether the final report, which is likely to be published in the early autumn, will be detailed or not.
It is surely inconceivable that once the French report has been produced, there will not be an opportunity in this country as well to explore questions about the circumstances leading to the sudden and violent death of the Princess of Wales and the man the entire world could see was her lover. The overwhelming public response at Diana's funeral could leave no doubt about the natural justice of allowing some form of British inquiry. The hostile response from some quarters to awkward questions about the Paris tragedy can never put the lid on worldwide demands for a thorough explanation of events.
It would be better for Parliament to treat with the questions and deliver the answers than to allow suspicion to fester and speculation to grow. It is in this context that other sources of information should be considered, in so far as they throw light on accountability.
The first of these additional sources which challenge Security Service accountability was the Princess herself. As with the other sources that I shall list, there have been those who devalue what she had to say. Her detractors have already called her manipulative and obsessive, but it would be unwise to dismiss what she said on holiday in the south of France.
I told the Home Secretary in my letter of 23 July last year that Al Fayed's much-publicised ideas about a conspiracy in Paris originated from what Diana repeatedly said to him of her fear and resentment at the way she was treated. I have no reason to doubt what I have heard of what Diana said in St. Tropez. In any case, there are many others in whom she confided in a similar vein—for example, Andrew Morton, Martin Bashir, Maggie Rae, Debbie Frank and so on.
Diana's remarks to Al Fayed concerned the royal household's antipathy to her; its habitually close links with the security services; the manipulation, interference and control, as she saw it, exercised by officials of the household; her conviction, based on what she said that she had been told, that Barry Mannakee's death was not an accident; and her apprehension that she, too, would be assassinated.
Three other sources of information could easily be discredited as disreputable, unreliable witnesses, but it may be short-sighted to ignore what they have to say, because they cast doubt on key questions of accountability. One is James Hewitt, in a recorded, but not televised, interview with Nick Owen. Major Hewitt's


shabby reputation will count against him but his remarks relating to the Princess of Wales cannot be dismissed altogether.
Hewitt said that he received threats to his life. Patrick Jephson, a private secretary, said that his safety could not be guaranteed. Members of the household told him that his safety would be in peril if he did not back off. Anonymous telephone calls warned him that he would meet the same fate as Barry Mannakee. He said that the Princess of Wales took the threats seriously and told him that Mannakee had been murdered.
Another such source is David Shayler, also in recorded but not televised remarks to Nick Owen. He said that Henri Paul could well have been a paid agent and that assassination attempts were certainly made by the security services. He said that MI6 is less accountable, with less supervision, than MI5, operating abroad with very different personnel from those who work for MI5; that MI6 regularly uses journalists and photographers as agents or stringers; and that MI6 operations and plans are by no means always communicated to Ministers—not even the Prime Minister.
Finally, and most controversially, there is Richard Tomlinson, a fugitive from Britain. I know little about his dispute with the security services but I have seen his sworn affidavit to Judge Stephan's inquiry in Paris, in which he asserted that MI6 files recorded an informant at the Ritz, almost certainly Henri Paul. He named—I shall not—two experienced, undeclared MI6 officers in Paris at the time of the crash. He also named an MI6 officer who in 1992 had a fully typed plan attached to a yellow minute board outlining a plan to kill Slobodan Milosevic in a tunnel car crash. The document was circulated to four other MI6 officers whom he named, but I shall not.
Tomlinson said that MI6 used part-time agents from UKN for surveillance and photography, including paparazzi who routinely followed the princess. He said that as well as routine MI6-royal household contact via the Foreign Office there was regular unofficial direct contact between senior MI6 officers and the household.
If there is to be clear accountability, there are many questions to be answered. For example, what prompted Scotland Yard to arrange the much-publicised arrest of Al Fayed when it already knew that Rowland had bribed the key witness? Did Veness discuss the safety deposit box allegations with the security services? Have the security services recorded with the Home Office an opinion about Al Fayed's citizenship re-submission? If so, what did they say and when? Has the royal household ever expressed a view to the Home Office about Al Fayed's citizenship?
Do records exist of the royal household's communications with the security services relating to the Paris tragedy? Why was Mannakee transferred out of royal protection duty and what is known about the circumstances of his death? Which members of the royal household made threats to Hewitt? What reasons does Jephson give for his advice to Hewitt? Was Henri Paul employed by MI6? Are there assassination plans on file at MI6?
To whom and to what extent does MI6 account for its operations? What were the operational duties of the undeclared MI6 officers in Paris at the time of the tragedy? Were any of the paparazzi pursuing the Mercedes employed by MI6? What records of telephone

messages, telegrams and memorandums exist on MI6 files concerning the events before and immediately after the Paris tragedy?
There are a great many more pertinent questions that should be dealt with openly and frankly in some form of parliamentary inquiry, to be conducted either by the Intelligence and Security Committee or by a special Select Committee appointed for the purpose.
There will be people who will try to rubbish as unreliable the sources of information that I have disclosed to the House, but if the Government or Parliament itself do not launch an inquiry, they will be shutting the door on precisely the sort of openness about the security services already advocated by the Liaison Committee and now being recommended by the Home Affairs Committee, and making a mockery of the Government's enthusiasm for freedom of information. Worse still, if an inquiry is refused and factual evidence implicating the security services in any way in the Paris tragedy trickles out later, the House will be seen to have failed in its responsibilities.

The Parliamentary Under-Secretary of State for the Home Department (Kate Hoey): I congratulate the hon. Member for Bexhill and Battle (Mr. Wardle) on securing an Adjournment debate on the accountability of the Metropolitan police service and other services, and on using it to draw the House's attention to a matter in which he has taken a long-standing interest.
I shall set out the general arrangements for accountability for the police service. As the hon. Member for Bexhill and Battle will know, policing in England and Wales is undertaken within the framework of the tripartite relationship of the chief officer, police authority and Home Secretary. The framework has proved resilient and capable of accommodating changing demands. It provides a service that is efficient and effective, but also accountable.
The chief officer is responsible for the direction and control of the force. He or she has operational independence and has flexibility in how the local police service is delivered. However, the chief officer must operate with regard to the policing plan, which is owned by the police authority.
The authority oversees the police force, holding the chief officer to account for his or her actions and monitoring performance as necessary. The police authority also provides local democratic accountability through its members, the majority of whom are local councillors.
The Home Secretary is answerable to Parliament and the public for the provision of an effective and efficient police service. He has a strategic role in setting ministerial priorities for the service and performance targets for those priorities. The hon. Member for Bexhill and Battle referred a great deal to the Metropolitan police service; the present arrangements for the accountability of that service are somewhat different. In particular, the Home Secretary is also the police authority.
The House will know that we have plans to bring the arrangements in London closer to those that apply in the rest of England and Wales, through the Greater London Authority Bill. Although it is clear that the arrangements


for the democratic accountability of the Metropolitan police service can be improved, there is already a substantial degree of effective accountability.
The hon. Member for Bexhill and Battle made many allegations and raised several points, and I am sure that he would not expect me to reply to them all this evening. It is also worth pointing out that matters relating to the security services are the direct responsibility of my right hon. Friend the Home Secretary. However, the hon. Gentleman raised, among other questions, the issue of whether the Metropolitan police have operated objectively and fairly in deciding whether to investigate certain allegations, and in the conduct of the subsequent investigations.
I must emphasise that the police retain, as they must, independence in such operational decisions. That is necessary in the interests of the impartial maintenance of the law. However, it is vital that the police should be properly accountable for their operational decisions and investigations. They are, of course, answerable to the courts, but there are also special arrangements in place for making complaints against the police and for the investigation of such complaints.
I cannot comment on the questions about reported operational decisions and actions by the Metropolitan police. The conduct of operations is and must be a matter for the police in London under the direction of the Commissioner. Subject to that, I can confirm that my right hon. Friend the Home Secretary was made aware of the concerns of the hon. Member for Bexhill and Battle about the safety deposit box scam, as he calls it. My right hon. Friend, in a letter of 26 February, explained to the hon.

Gentleman that he had drawn those concerns to the Commissioner's attention, and that the Commissioner had assured my right hon. Friend that every endeavour was being made to balance the needs of the investigation with scrupulous fairness.
In subsequent correspondence, my right hon. Friend the Home Secretary also confirmed that the Commissioner was fully aware of the representations made by Al Fayed's solicitor about the security box investigation. The hon. Member for Bexhill and Battle promised that he would return to the subject with vigour if the actions of officers in the Al Fayed investigations gave rise to public humiliation and the allegation of theft turned out to be unfounded. True to his word, he has done so tonight in this debate.
The hon. Member for Bexhill and Battle knows that special procedures exist for making complaints about the police. He and others may wish to consider those procedures, and he will know that the Government at present are acting on many of the suggestions made by the Select Committee on Home Affairs. We hope to bring about changes in the police complaints process as soon as possible.
The hon. Member for Bexhill and Battle will appreciate that I cannot give an answer tonight to a number of the matters that he has raised. However, I shall draw this debate to the attention of my right hon. Friend the Home Secretary. I am sure that we shall write to the hon. Gentleman about any matters that have not been covered fully this evening.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to One o'clock.